XRP, The 100 Banks and the Exposure Gap Explained

Hinzugefügt: 2026-05-07

[00:00:01]Okay guys, I had to reord this video.

[00:00:05]For some reason, it didn't didn't record. So, let's analyze the 100 banks that are testing Ripple before the clariac. And this is not a coincidence and this will prove and we also going to talk about the exposure gap uh and how it ties to these 100 banks.

[00:00:25]Um so over a 100 banks are now testing ripples network in live or pilot environments. What is the purpose? These pilots focus on crossber settlement efficiency, liquidity management and integration with the existing swift rails. Now Ripple is positioning XRP as complimementaryary institutional set asset not a speculative token bridging blockchain and traditional finance.

[00:00:51]That's why you see repo connected with 13,000 banks.

[00:00:56]What is the regulatory context? Adoption depends on regulatory clarity, the clarity act and technical validation before full deployment. So we don't have that yet. So in short, the 100 bucks narrative is grounded in verifiable institutional testing is not a rumor. We put partnership with Santandere, Bank of America and other global systemic important banks demonstrate demonstrate that the infrastructure for largecale settlement trials is already active and expanding. Why seeing central banks central banks plus repo before clarity act is meaningful?

[00:01:36]Here's the part that matter guys.

[00:01:38]Central banks do not experiment with retail grade assets. They only sit at the table with infrastructure grade rails and the pattern is consistent across every public CBDC.

[00:01:51]Bhutan Ripple, Palao using Ripple, Montenegro ready with Ripple. Hong Kong Monetary Authority Ripple interpretability.

[00:01:59]Colombia repo pilot. National Bank of Georgia repo finalist. 20 more additional central banks. Talking about central banks here, repo private XRP ledger. CBDC platform confirmed by Ripple own CBDC team. I'm not creating anything here.

[00:02:17]Meanwhile, Bitcoin is not using any central bank settlement pilot. Ethereum is not using any central bank settlement pilot. Ripple is this is not tribalism is functionality. Central banks need deterministic settlement. Finality, low latency, compliance, auditability, predictable liquidity, no probabilistic consensus, no congestion, no forks, only one ledger in the crypto space fits that profile. You want to guess which one?

[00:02:45]By this matters, why this matter?

[00:02:47]Because before the clarity act, because central banks do not wait for retail legislation to begin building infrastructure. They move early because they need multi-year testing. They need interoperability frameworks. They need liquidity modeling, collateral simulation, real set seedment stress test, crossber corridor mapping. So the fact that Ripple is already in the room means Ripple is being treated as infrastructure, not speculation. And infrastructure is what central banks care about.

[00:03:21]When I say the 100 banks, I'm not talking about 100 literal commercial banks. I'm talking about the institutional stack that must be synchronized for administrative repricing to even be possible. To understand how they connect to the repric, we map the system in layers. So the 100 bank networks is actually six institutional layers and this is how everything works. I'm going to give you a pyramid image. The layer one is central banks. There's 20 or 30 globally that they control settlement rules, collateral eligibility, liquidity corridors, forex swap lines, reserve behavior. These guys are the policy layer. No administrative repric can occur without them.

[00:04:13]Layer two systemically important banks talking about JP Morgan, HSBC, Santandere, BMP, Paribas, City, Deutschia Bank etc. These are the plumbing of global segment. They run correspondent banking, nostro networks, forex, forex desks, derivative books, repo markets. They are the execution layer. Layer three is the clearing houses. So examples DTCC, Eurocan, CLS, CLS, they enforce settlement finality.

[00:04:49]They do the netting, collateral posting, margin requirements. They are the synchronizing synchronization layer.

[00:04:57]Then you have the layer four. That's where the black fidelity, the BNY melons arrive. They are they hold the tokenized assets. That's why you see Larry Fang talking about tokenization.

[00:05:10]They are the institutional they hold the institutional XRP collateral pools liquidity reserves.

[00:05:18]They are the collateral layer.

[00:05:22]Layer five payment processors like Visa, Mastercard, Swift, Fire, Chips, SEPA, they are the transaction layer. And layer six is the regional bank, credit unions, local institutions. They don't drive the repric they inherit it. They are the distribution layer. So why they must be connected for an administrative price repric? An administrative repric is not a market event. It's a systemic initialization. The system initialize something for it to work. Collateral rules must match. Liquidity corridors must match. Reserve ratios must match.

[00:06:01]Settlement parameters must match.

[00:06:03]Valuations also must be identical across all nodes. If even one major node is out of sync, the system breaks. This is why the 100 banks matter. These are the minimum quantum required to enforce a synchronized global non-organic valuation event.

[00:06:21]What connects them? The five synchronization channel. These are the real mechanisms. Basel 3 and four defines high quality collateral, liquidity coverage, leverage ratios.

[00:06:32]Every price changes this instantly. ISO 222 it simply defines the messaging the metadata setment instructions a repric requires identical messaging across all institutions that's why they force everyone to be ISO 222 compliant cls and forex settlement ensures no settlement risk synchronized forex conversion liquidity netting every price must be reflected in forex corridors repo and rehypothecation framework.

[00:07:08]That's how bankers makes the money.

[00:07:10]Banks needs collateral value, reuse multiplier, margin buffers. A reprice injects this instantly.

[00:07:19]So why the administrative repric must happen before corals open and still lot of you come and fight me because they say that you cannot have an administrative repricing and everything has to go slowly linear and blah blah blah. This is the part that you don't understand. If corridors open before valuation, liquidity is insufficient.

[00:07:39]You don't have liquidity. Spreads explode, volatility spikes, settlement fails, banks cannot post collateral.

[00:07:46]They cannot tokenize because they can't scale and repo markets cannot start. If you open a swimming pool and you want a 100 people or a thousand people to come and enjoy the swimming pool, but there's no water, you're in the oven.

[00:08:02]What if you start at 100K? Collateral now it's instantly sufficient. Liquidity is instantly deep. Spreads collapse.

[00:08:12]Settlement collapse is deterministic.

[00:08:14]Becomes deterministic.

[00:08:16]Tokenization now it's instantly viable.

[00:08:19]Banks become solvent. Ripple markets ignite. And this is why my statement is correct. 100K from the start is instant liquidity. It's not a prediction. It's a requirement.

[00:08:32]So the connection summary the 100 banks are not predicting the price.

[00:08:40]So the reprise sorry they are the infrastructure that requires it. Central banks need collateral density.

[00:08:48]Global systemic banks need solveny and liquidity. Clearing houses need synchronized valuation. Custodians need price certainty. Payment networks need deterministic settlement. and regional banks need inherited stability. The administrative repric is the only configuration that satisfies all six layers simultaneously. market repricing market um uh organic increase doesn't doesn't you simply don't have liquidity you don't have solveny you don't have collateral density automatically your idea that it has to be slow and corridors will open first it it's it's destroyed so I make a six layer system table central banks global systemic banks cleaning houses custodian payment networks examples of each one federal banks uh global systemic bank JP Morgan CD DTC See the cleaning houses, Black Rockck act as custodian, as managers, Fidelity etc. Swift is a payment network. Credit unions are the last. So the system functions they do netting uh they do forex the global systemic banks repo markets policies are coming from the central banks and what they do they trigger administrative repric the central banks. They revalue collateral.

[00:09:59]The global systemic banks update the balance sheets to its new valuation.

[00:10:04]Clearing houses synchronize settment to the new valuation. Update margin requirements.

[00:10:11]The custodians deploy the collateral and they put it to work and uh payment networks activates the liquidity across all corridors making it like the banker and the regional banks are what we usually use and they inherit all of that. So this is the this is the flow. Administrative reprise being triggered by the central banks. Collateral evaluation by the global systemic banks. Settlement synchronization by the clearing houses.

[00:10:37]Collateral deployment. Custodians and asset managers. Liquidity activation by the payment networks. Distribution layer updates by the regional banks.

[00:10:46]Uh what people call the 100 banks really is not a 100 liter banks. um is a shorthand for the global institutional stack that must be aligned for the new segment assets to function. This includes central banks, largest uh global banks, clearing houses, custodians, payment networks. These are not banks, regional banks. These institutional already coordinate on forex setment, liquidity corridors, collateral rules, reserve requirements, crossborder payment because they operate on a synchronized system. Any major change like introducing a new high value settlement asset must be coordinated across all of them. This is why people say the 100 banks will set the price.

[00:11:34]What it really means is the institutions that run global settlement must agree on the valuation so the system can function without volatility or liquidity shortages. This is not speculation. This is not opium. This is infrastructure.

[00:11:50]So retail think markets set the price.

[00:11:53]Institutions know systems set the price.

[00:11:58]Retail believes supply demand speculation charts blah blah blah.

[00:12:01]Institutions operate on collateral rules, liquidity requirement, basal frameworks, settlement finality. Retail cannot imagine a non-market valuation event. But it's not my fault. It's your fault for not believing it or understanding it. Retail cannot process large numbers. When you say $10, people say fine 100, okay, a,000 $10,000 they they already start disbelieving. And 100,000 they they say you're you're crazy. or just too uh extreme cognitive shutdown happens at that time. So their brain hits a psychological ceiling. They will never allow XRP. They will never accept $1,000. So not because the number is wrong. I prove the math is wrong. What is needed?

[00:12:46]It's just because they have no mental model for institutional collateral. They want to continue fighting this. So retail thinks gradual adoption.

[00:12:53]Institutions think system initiization.

[00:12:57]You see either you believe what you want to believe or you believe the institution retail imagine coros opening usage increasing price rising slowly.

[00:13:07]Institutions don't cannot accept that because institutions require instant liquidity instant collateral density instant solveny instant settment reliability. This requires a jump not a curve. So retail has no concept of global depth derivatives collateral multipliers. They cannot understand why 100,000 is not too high, why 10,000 is not enough, why the system needs density, not hype that they think in wallets, institutions think in balance sheets. So is this 100 bank agreements related to the gap exposure and the six months limit? I mean speaking about the exposure gap after the client act approval. You bet. The 100 bank alignment is directly tied to the exposure gap and the six three months limit after the clarity act.

[00:13:58]Let me show you what what I mean what I'm going to go deeper into the this exposure gap.

[00:14:04]The 100 bank agreement are the mechanism that prevents the exposure gap from blowing up the system. Once the Clarity Act passes, the system enters a legally dangerous window.

[00:14:20]The exposure gap equals the period when the old fiat valuation no longer match the new digital asset collateral requirements.

[00:14:32]Get it right. During this window, banks cannot meet basal ratios. Collateral is insufficient. derivatives exposure becomes unhedged.

[00:14:44]Liquidity buffers fail. Auditors cannot sign financials. And I'm going to go deeper in a few minutes explaining you why the auditors will not sign any financial even if you threatening them just to cut their hands.

[00:14:57]Regulatories cannot certify law uh solveny. The same will happen with the cleaning houses. And this is why I said extending more than six months after the clarity will become the exposure gap and that becomes a liability. And that and I'm correct.

[00:15:15]The 100 bank agreements exist to ensure the exposure gap does not extend beyond the 3 to six month window because if it does the system collapses.

[00:15:26]Why the 100 bank alignment is required before the rice.

[00:15:32]The reprice is not a price event. It's a synchronization event across central banks, global systemic important banks, cleaning houses, custodian, payment networks and regional banks. Everything is needed. You cannot use only banks.

[00:15:49]So these six layers are the foundation of the banking system.

[00:15:56]And these six layers must be aligned before the repric. Because if one of major institution is out of synchronization, the repric creates arbitrage, insolvency and a systemic failure.

[00:16:12]This is why the agreements exist to lock valuation to lock collateral rules to lock liquidity corridors to lock settlement parameters to lock reserve treatment. The 100 bank alignment is the pre-repprise handshake and that's what we're seeing. This is the pre-pric handshake.

[00:16:35]So why the sixmonth limit exists?

[00:16:40]This is the part retail cannot understand.

[00:16:44]Once the clarity act passes and it will XRP becomes legally usable. right now is not legally usable but not yet priced for systemic collateral. It cannot be used as systemic collateral because of the price because it doesn't have a statutory uh assignation. Banks must prepare balance sheets. Auditors must prepare new frameworks. Auditors and regulators like clean houses must prepare new ratios.

[00:17:19]this preparation windows it cannot be extended it's finite so 3 to 6 months is the maximum time banks can operate under old valuations without with the new rules right let's say that uh one example what happened in California I was like saying that by 2027 or whatever I don't remember all all all engines must be electric so you're going to have a time frame before you switch cannot be done like tomorrow.

[00:17:49]So after that capital ratios break, liquidity coverage fails, derivatives exposure become uncolateralized, systemic risk explodes. So the system must repric before the window closes. So this is why the 100 bank alignment is not optional. It's a deadline driven requirement. So the 100 bank alignment is the bridge between the legal activation which is the clarity act and the systemic activation which is the administrative repricing. Without the administrative repric you cannot activate the system but period without the alignment the exposure gap becomes little.

[00:18:31]Why the reprise must happen before the corridor open. I hope this you guys can stop challenging this. I'm going to explain you and leave no doubt whatsoever because the corridors require deep liquidity, stable spreads, deterministic settlement, collateral certainty. If corridors open before the reprise, for those of you who keep challenging this, liquidity is insufficient, spreads explode, settlement fails, banks cannot post collateral. They cannot instantly start acting. They cannot tokenize because they can't scale. This is why my statement is correct. 100,000 from the start is instant liquidity, instant equity for the banks. It's not a prediction. It's a system requirement.

[00:19:22]It's a swimming pool with no water.

[00:19:26]So yes, the 100 bank agreements are directly tied to the exposure gap and the six months limit after clarity act approval. They exist to prevent systemic insolveny, synchronize valuation, enforce collateral rules, prepare balance sheets, enable the administrative repric, close the exposure gap safely. Without the 100 bank alignment, the system cannot repric. Without the repric, the system collapses inside the exposure gap.

[00:19:59]This is why it's hardline uh influencers think in price prediction not in system requirement. So what price will hit? Institutions ask what valuation is required for the system to function. Influencers influencers will not understand because 100 times is not opium.

[00:20:19]Why wait 10k is not enough? Because the reprice must be instant.

[00:20:24]Why corridors cannot open first? Why the timeline is rigid?

[00:20:28]Because they think price is the outcome.

[00:20:30]In reality, price is the configuration.

[00:20:33]This is outside the cognitive model.

[00:20:35]Influences are psychological invested in being right, not in understanding.

[00:20:39]That's why you guys are fighting me and fighting me and fighting me and every time I I I I I I I shut down your your your you continue. You continue contin but you were wrong with the time of the act. I never say it was going to happen on this day. I say there's there's a time frame from the day that the act is nobody knows when the glacia act is but anyways the system is structured. The repric is administrative. The timeline is regulatory. The valuation is collateral driven. Then everything they've say for years collapses. Their identity is built on prediction, entertainment, personality, audience validation. My model is built on architecture, collateral mechanics, institutional behavior, systemic constraint. These two identities cannot coexist. So they reject the structural model to protect their self image. But anyway, influencers cannot accept a timeline they don't control. The clarity act the exposure gap 100 bank alignment the repric sequence is simple it's legal regulatory institutional and enforcement there's no need of theories that this and the bank and japan and blah making like good it's simple it will be administrative repricing because there's no liquidity influencers cannot influence it they cannot predict it they cannot shape it they cannot monetize it so they default to mockery deny oversimplification ation opium accusation because the real time removes the illusion of authority.

[00:22:10]So influencers are trapped in that organic adoption that we have to go slowly and see a 10 and 100 and 500 and and and 1,000 and it cannot go that that that high because they can accept it. That's the only way that it cannot happen because they don't they don't agree.

[00:22:28]That's all. They don't have any any any way of of defending that. So the real system I prove you requires instant collateral, instant liquidity, instant solveny, instant settlement reliability, which means the reprise must happen before corridors open. Influencers cannot process this because it destroys their entire slow adoption story line.

[00:22:52]So you do not understand the hund alignment because you don't understand synchronization. You don't understand the six layers that are required and you don't. And you think banks are act independently. They don't. They all need each other. They all need the swift.

[00:23:06]They all need the regulator. They all need the auditors. They all need everything. They all need swift.

[00:23:12]Price is market driven and they think adoption is gradual. But in reality, settlement must be synchronized. That's why you have that time uh frame and valuation must be identical. That's why we're seeing those 100 banks aligning and pre-shaking hands for the administration reprise.

[00:23:31]It's coming. Collateral must be uniform.

[00:23:34]Liquidity must be deterministic.

[00:23:37]This unfortunately for you, but you won't understand this requires a coordinated administrative valuation event.

[00:23:48]You will not imagine coordination at this scale because you never operated inside a system that requires it. Then it's fine. You don't don't want to be don't want to believe it. But if what happens if they keep extending and they ignore the six months gap exposure? What's the punishment you will ask? There is no punishment in the sense that retail imagines. There is systemic failure. That's all. And and that's why they cannot extend this exposure gap indefinitely.

[00:24:18]And I'll show you what what I mean with this. The system cannot ignore the six months exposure gap because it's not optional. The exposure gap is not a rule. It's not a guideline. It's not a policy. It's a structural limit. Once the clarity act passes, the old valuation become invalid. And I'm going to explain you why and what the old valuation means. New collateral rules activate. Balance sheets must reflect the new standards. Auditor certified solveny legacy new digital different prices different assets. So this creates a hard deadline.

[00:24:53]If they extend beyond the six months the system doesn't get punished the system breaks. So what actually happens if they extend past the exposure gap a systemic liquidity crisis will happen. Not a fine, not a penalty, not a slap on the wrist. a mechanical failure because after six months banks cannot meet basal three and four capital ratios derivatives become under collolateralized liquidity coverage ratios fail auditors cannot sign financial statements and I'm going to explain you why they cannot sign and they will not sign even if you threaten them to cut their hands cleaning houses cannot certify settlement so forex test cannot hedge exposure repo markets will freeze payment networks lose the solvency guarantee. So this is not theoretical. This is balance sheet math.

[00:25:45]Why they can't ignore it? Ignoring the exposure gap will cause insolveny events. Banks will fail capital requirements. Derivatives contagion.

[00:25:54]Margin calls cannot be met. Clearing houses shutdowns. DTCC clar cannot certify settlement. Auditors refusal.

[00:26:04]Auditors cannot legally listen to me.

[00:26:06]Auditors cannot legally sign off on books that violate capital rules.

[00:26:12]Regulatory intervention. Supervisors must step in when ratios break.

[00:26:18]Liquidity collapse. Repo markets freeze.

[00:26:22]Interbank lending stops. Payments halt.

[00:26:25]This is not punishment.

[00:26:28]This is physics. This is collapse. Why the 100 bank alignment exist? This alignment is not a deal. It's not a plan. It's not a conspiracy. It's a synchronization mechanism to prevent the exposure gap from triggering systemic collapse. The 100 bank alignment ensures collateral rules match, valuation is synchronized, liquidity corridors are ready, settlement parameters are uniform, balance sheets can transition safely.

[00:27:00]Without this alignment, the system cannot survive the exposure gap.

[00:27:04]Why they they cannot extend the timeline? Because the timeline is not political. It's not discretionary. It's nonnegotiable.

[00:27:12]So it's enforced by basal capital ratios, liquidity coverage requirements, derivative margin rules, auditor certification deadlines, clearing house solveny standards. These are hard constraints. If they extend exposure gap, the system collapse before the reprice can happen. That's the real punishment.

[00:27:34]They cannot extend the exposure gap because the system becomes insolvent if they do period. This is why the 100 bank alignment exists. The repric must occur inside the window. Corridors cannot open first. Valuation must be administrative.

[00:27:52]Liquidity must be instant. The timeline is not a choice. It's existential. So let me explain you why auditors will not sign once the exposure gap opens.

[00:28:05]It's about legal liability and professional survival. An auditor's signature is not symbolic. It's legal certification that the bank is solvent.

[00:28:15]Capital ratios are accurate. Collateral is properly valued. Liquidity coverage is sufficient. Risk waiting rules are followed. Remember what I talking about that when I when I spoke about the 1250 risk weight that has right now but when they assign a tier one that capital risk uh ratio drops to zero that's why you cannot continue with the valuation because the valuation is obsolete now you are talking about a tier one so if they sign knowing the valuations are wrong if they sign knowing the bank is insolvent if they if they sign knowing the the capital ratios are inaccurate. If they sign knowing the collateral is not properly valued and there's no liquidity coverage to act as a as a collateral layer, they lose their they they lose their license. They are subject to civil liability, criminal liability, professional sanction, catastrophic lawsuit, they lose their license.

[00:29:20]So yes, they will stop signing after the time frame of the exposure cap, not because they're good people, because the law forces them to CCP cleaning houses cannot certify settlement either. Accuring houses like DDTC, CLS, Europe clear must guarantee margin sufficiency, collateral adequacy, netting accuracy, settlement finality.

[00:29:51]If the exposure gap persists, collateral becomes insufficient, margin calls cannot be validated, netting becomes inaccurate, settlement cannot be guaranteed. A CCP cannot legally operate under those conditions. So they must halt or become liable for systemic failure.

[00:30:08]Why this forces the system to act?

[00:30:10]Here's the here's the truth guys.

[00:30:12]Auditors and CCP are the secret breakers of the financial system. If they stop and when they stop, banks cannot publish financials.

[00:30:24]Regulators cannot certify solveny.

[00:30:26]Markets cannot settle. Liquidity freezes. Interbank lending stops meaning all banks will not cover their position.

[00:30:37]payment network stall swift will stop working.

[00:30:43]So this is not a pun. This is a mechanical shutdown of the whole system.

[00:30:50]So why the exposure gap cannot be extended?

[00:30:57]Because extending it means no auditor can sign, no CCP can certify, no regulator can approve, no bank can operate.

[00:31:14]This is the real constraint. Not politics, not speculation, not opium, not influencer narrative. It's balance rules. That's why The system is forced into the repric.

[00:31:36]Once the clarity act passes, all valuations become invalid.

[00:31:42]New collateral rules activate. Banks must transition. They don't have any choice. Auditors must certify. CCP must validate. If the exposure gap continues, the system becomes insolvent. Auditors refuse signatures. CCP halt settlement.

[00:31:59]Regulators intervene liquidity collapses. The only way to prevent this is administrative repricing because only a synchronized valuation restores collateral sufficiency, restores capital ratio, restores liquidity coverage, restores settlement integrity, restores auditor sign off, restores CCP cleaning houses certification. This is why reprice is not optional. It's structurally forced.

[00:32:26]So when I say no auditor will continue any signature or cleaning houses because if the banks collapse, their signature is there and they will be liable for ignoring the rules. This is precisely how auditors think. This is precisely how cleaning houses think. This is precisely how regulators think. And this is why the exposure gap is a hardline, a deadline.

[00:32:52]The 100 bank alignment is mandatory. The repric is inevitable. Let me repeat this. The repric is inevitable. Not because of belief, because of systemic constraints. It's the system that requests the repricing. Not me. Why all valuation becomes invalid?

[00:33:12]You will ask why you you you mention why all valuations become invalid and why they have to uh why they will not sign the valuation. or valuation becomes invalid because the legal regulatory and accounting framework that supported those valuation no longer exist once the new system is activated. All valuations are tied to the old system rules. Every asset in the legacy system is value according to all liquidity assumption, all collateral rules, all risk waiting, all settlement rails, all accounting standard, all regul regulatory definition. XRP right now has a regulatory not has no regulatory definition has a risk wer uh weight ratio of 1250 because it's not a tier one um asset when definition changes valuations must change because the asset is not the same as it is right now the price is not the same the collateral assignment and the value is different and That's why you cannot continue under the old system. Valuation is a function of rules. So con by consequence once the new rules activate the old valuation model becomes illegal to use. This is the part that retail never understand but they continue to argue. Auditors cannot use all valuation models. Banks cannot use collateral multipliers.

[00:34:38]Green houses cannot use all margin formulas.

[00:34:42]Regulators cannot use old capital ratios. Accounting firms cannot sign off on old frameworks. The old valuation model is not just wrong. It becomes non-compliant. It becomes illegal. So using it will be a regulatory violation, an accounting violation, a basal violation, an auditor liability event.

[00:35:03]So the old valuation cannot continue. So all valuation for example assumes XRP is a speculative asset. That's what we have right now the old valuation but clarity act reclassifies it before clarity act XRP is treated as a speculative digital asset not a setment asset not a high quality collateral asset not a tier one not a reserve eligible instrument but after clarity act XRP becomes a regulated settment instrument so the valuation doesn't apply anymore for XRP because now it's regulated it's not speculative eligible for collateralism ation. It was not eligible for collateralization, eligible for liquidity coverage, eligible for institutional balance sheets. Now it drops if it as as soon as administrative price is given, it becomes a tier one. Now the risk ratio drops from 1250 as it has right now to zero.

[00:36:05]So this reclassifi reclassification invalidates the old price and the old valuation because the old price was based on retail speculation, low liquidity, no collateral use, no institutional demand, no systemic function. Once the function changes, the valuation must change. So all valuations cannot support the new system collateral requirement. This is the mathematically constraint. The new system requires deep liquidity, high collateral density, stable valuation, deterministic settlement. The old price under $1, $10, $100 will not and cannot support global settlement. Collateralized derivatives back liquidity corridors meet basal 3 to4 ratio satisfy CCP margin requirements.

[00:36:56]Therefore, all valuations are structurally insufficient.

[00:37:01]They cannot support the system. They cannot support the balance sheet. They cannot support the collateral requirements. So, they must be replaced because it's obsolete. So, all valuations break the balance sheet once the rules the new rules activate.

[00:37:21]That's why the valuation must be replaced and and nobody will sign. No, no auditor will sign because it's a different ratio, a different requirements, a different risk weight ratio. If banks try to operate with the valuation after the credit act, capital ratios fail, liquidity coverage fails, collateral buffers fail, derivative exposure becomes enhanced, auditors cannot sign, CCP cannot certify, regulatory uh regulators must intervene.

[00:37:47]This is the exposure gap. It's not a theory, it's a balance sheet failure window. And this is why the system cannot extend it. All valuation becomes invalid because the system that produced no longer exist. This is the cleanest way to say it. All valuation are a product of the old rails. And once the rails change, the valuation model collapses. The new rails require administrative valuation, synchronized pricing, collateral sufficiency, liquidity depth, institutional solving, instant equity. The old rails cannot provide that. So the all valuation becomes obsolute, non-compliant, insufficient and invalid.

[00:38:26]All valuation by consequence become invalid because the legal regulatory accounting and collateral framework that supported them are replaced. That's why you have six months in order just to adapt. Once the new system activates, the old price cannot be used. The old model cannot be applied. The old assumptions cannot be certified. The old liquidity cannot support settlement.

[00:38:50]Therefore, the system must repric, not to pump the asset, but to remain solvent. That's why the 100 banks, the central banks, 20 or 30 of those clearing houses, Swift, they're all positioning, synchronizing because the administrative reprise is being prepared. See you on my next.