A Closer Look at XRP

Do the Comments from the CEO of Ripple Pass the Smell Test?

Ripple (XRP) is the third largest token by market capitalization and their CEO went on TV today and made a rather interesting pronouncement: Ripple will be used by banks by 2019. CEO Brad Garlinghouse believes that banks will soon see XRP as a liquidity tool. The main driver for this belief is XRP’s transaction speed, which is much faster than bitcoin’s – not to mention it is much cheaper per transaction.

“I’ve publicly stated that by the end of this year I have every confidence that major banks will use XRapid as a liquidity tool,” Garlinghouse told CNBC in an interview at the Money 20/20 Europe fintech conference in Amsterdam, Netherland, that aired on TV on Tuesday.

“Comparatively you have bitcoin taking 45 minutes to hours to settle a transaction, and the cost can be three dollars to 30 dollars,” he said. “That might be cheaper to the alternative in today’s banking system, but it’s not really an Internet of value and a true step forward in how we can allow value to move when information moves today.”

Obviously biased, Garlinghouse sees XRP as valuable because of its xRapid product. This blockchain-based system allows emerging market companies in foreign investment situations a chance to inject capital into xRapid, convert it to XRP and then convert it back into a third currency. XRP has a four-second transaction time, this process would be quick. Some companies, such as Western Union and Moneygram, have begun trialing xRapid, but none have committed to it fully.

XRP already has been selected by Santander for its international transactions. Santander stands as the first bank in the United Kingdom ever to have adopted a use of a digital asset, which became the case ever since Santander bank announced that they will be adding a blockchain-based service to the existing offer for their clients, adding that the service will be driven by Ripple’s technology.

XRP has already inked a number of partnerships. In February 2018, Ripple announced five new partnerships — the banks Itaú Unibanco and IndusInd, as well as three remittance providers InstaReM, Zip Remit and Beetech.

To conclude, Garlinghouse said that each digital asset’s value will be created from the utility it creates. Currently, the crypto-verse is full of hype but an equilibrium will soon be seen when reality and hype balance out. This means the markets will be less volatile in the coming future. In short, the cryptoverse will move away from hype and settle more on practical value.

This view means that coins like XRP and ETC will be more valuable as utilities versus stores of value like BTC.

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