Ripple (XRP)–Ripple has become synonymous with the banking industry. From the coin’s inception, Ripple (both the company and the currency XRP) has been pushed as a cryptocurrency to disrupt the financial industry. The earliest manifestation of Ripple was to improve the efficiency and cost-effectiveness of bank to bank transfers, using the security, speed and low fees of blockchain and cryptocurrency as a competitor to the industry-leading SWIFT.
XRapid, using XRP for liquidity, provided a new partnership arm for banks, particularly those looking for global money transfers, to use cryptocurrency with improved efficiency. Cuallix, the Mexico based financial company, was one of the earliest institutions to adopt XRapid for cross-border transactions. The move has paid dividends thus far and provided proof for the cost-saving measures of using XRP for transactions, as opposed to just the Ripple technology. American Express was one of the next major partnership announcements for global money transfers. However, the partnership neglected using XRP directly in transactions.
Ripple Growing Partnerships
The first two months of 2018 have been good for Ripple in terms of growing partnerships. MoneyGram kicked off the trio of pilot programs Brad Garlinghouse, CEO of Ripple, alludedto in a tweet in early January. Since that time, Western Union has joined the growing list of companies instituting trial programs for Ripple and XRP-based transactions. These partnerships represent a deviation from the original intention of Ripple–as a tool for bank to bank transfers–but still fall in line with the overall goal of improving global money transfer. Western Union and MoneyGram both command billions of dollars in revenue, in an industry that moves trillions worth of capital each year. The former has fees up to 10% of the total transaction cost, which is a substantial amount for migrant workers and others attempting to send money to family or friends in other countries. Ripple has the potential to disrupt this industry further, bringing costs down to a fraction of what they are now. The money transfer firms (Western Union, MoneyGram, etc.) can either pass the savings along to the customer, or open the door to some innovative developer who can build an XRP-based platform to do just that.
Bottom line: the utility of XRP and the scalability of the Ripple network is one that allows an infinite amount of innovation. Last week, we wrote about how Porsche and Ripple would make the perfect match for the ultra-high end sports car company to integrate cryptocurrency into its vehicles. Uber, particularly as it eyes the transition to full-automation, could be looking to XRP as a seamless form of payment and security. The outright novelty of cryptocurrency is going to be an alluring factor for years to come, despite the current woes over valuation and price decrease.
Beyond Banking for XRP
Looking at the early days of the internet and the Dot.com Bubble, Ripple and other cryptocurrencies seem to be following a similar trend in adoption. Excitement and modernization in technology always brings an influx of capital, especially before exponential adoption takes place. Cryptocurrency has had a slow crawl into the media spotlight, but hedge fund investors, Silicon Valley billionaires and a slew of others have been investing in the industry for most of this decade. Like the Dot.com Bubble, cryptocurrency is exhibiting overbought and overvalued market conditions that have led to extreme volatility and massive dips in pricing. The whole world is still trying to figure out what cryptocurrency is and how it can best be used for profit and real-world efficiency. The market is reflecting that uncertainty in the short term, but a feature that could extend for many more months.
The way forward for investors, enthusiasts and those taking interest in cryptocurrency is to examine how the technology can be used and contemplate ways that it could improve the world. Like cars, computers and education, that process of discovery begins with a close inspection of the fundamentals. Of the all the currencies in the industry, no crypto offers as much utility and usability as XRP. Ripple has the cheapest fees, the fastest transaction times and an ability to scale that far surpasses anything else on the market. Those three features, like a box of legos, allow for the innovation and ingenuity of Ripple implementation to far exceed the rest of the industry. If there is one currency that has the potential to disrupt other markets, it’s Ripple. Partnerships aside, the most exciting feature of Ripple is the ways in which it will be used now and in the future. Banks could turn to Ripple for faster and cheaper global transfers, but the average person could be using XRP to pay their Uber fare by the end of the year. One of those partnerships will have a massive impact on the general public, despite both being good for the overall growth of Ripple and cryptocurrency as an industry.
Banking may provide the most alluring, near-term implementation for Ripple, but it’s use of the XRP currency in every day life that will warrant long-term interest.