American Model Shares Potential XRP Role in Japan’s $4.5 Trillion Reverse Carry Trade

American model Bri Teresi recently discussed the idea that XRP could play a role in Japan’s reverse yen carry trade, a multitrillion-dollar unwind now moving through global markets. 

In a recent post on X, Teresi said she believes XRP matches the type of fast and programmable system that the financial infrastructure of today needs. 

Teresi Spotlights XRP’s Strengths

She called attention to guidance from the Bank for International Settlements (BIS), which says an effective settlement asset should turn over 8 to 10 times a day so banks avoid holding slow-moving currency. 

I believe XRP will be used as a bridge asset in the reverse Yen carry trade. Right now, the BIS says an efficient settlement asset should turn over 8–10 times per day to prevent banks from sitting on huge piles of stagnant currencies. But in a new financial system that’s faster,…

— Bri Teresi (@briteresi) November 27, 2025

Teresi argued that newer systems focus on speed, and she sees XRP meeting that requirement, with SBI Remit in Japan already using it for faster cross-border settlements.

According to the model, XRP’s design allows it to move far faster than the BIS benchmark. After watching an analysis from crypto educator Lewis Jackson, she raised an important question: if trillions begin crossing borders as this reverse carry trade unwinds, what kind of transaction speed will regulators expect from a bridge asset like XRP?

What is The Reverse Carry Trade?

For context, Jackson highlighted the entire situation in a recent podcast episode. During his commentary, he discussed how a carry trade works, using a simple example. 

Specifically, a person could borrow $100,000 in a country offering 0% interest, convert the funds into their own currency, and invest it at a 5% return. After one year, that investor would still owe exactly $100,000, but the investment would produce $105,000, leaving $5,000 in profit. 

Jackson explained that Japan enabled this type of strategy for more than twenty years because the Bank of Japan cut interest rates to 0% in 1999, held that level for years, and even pushed rates negative in 2016, which effectively paid people to borrow.

He noted that this environment created what the market calls the yen carry trade. Ministry of Finance data places the size of this trade between $4.2 trillion and $4.5 trillion, with major global banks and financial institutions taking part. The Bank for International Settlements documented this activity as well.

However, everything changed on March 19, 2024, when the Bank of Japan ended its negative-rate era and raised its benchmark rate to 0.1%. Jackson said the small move created major concern because investors feared more hikes could follow. 

Notably, higher rates would erase the profit potential of carry trades, so many traders started to unwind their positions. This led to the reverse carry trade. He estimated that roughly 40% of the trade had already reversed, leaving 60% still active. This remaining portion could strain the system if it unwinds too quickly.

XRP Could Have a Role to Play

Jackson then explained why some people in the crypto community believe XRP could help. For context, reversing a carry trade at this scale requires fast and reliable currency conversion, and traditional rails often move slowly and cost a lot. 

According to him, XRP offers a quicker, cheaper, and more secure way to move value across borders. He then highlighted Japan’s long relationship with XRP. Specifically, SBI Remit uses XRP for payment routes between Japan and the Philippines and between Japan and Indonesia. Also, Japanese institutions maintain long-running partnerships with Ripple, which gives the theory more weight.

Jackson noted that he had studied BIS documents, Japanese regulatory material, and SBI Remit’s integrations, and confirmed that the major details behind the reverse carry trade storyline all come from established sources. 

He then called attention to discussions over how XRP’s price might react if these flows ran through the asset, with some predicting price surges to thousands. While Jackson does not support any specific prediction, he said Japan’s policy shift, the scale of the unwind, and XRP’s presence in the country create a setup that deserves serious attention.