Ripple’s CEO, Brad Garlinghouse, has been active in the PR arena recently. He was at the Swiss National Bank conference last week, and he’s also been giving interviews to the media.
Speaking to CNBC (in the middle of last year), he said that Ripple’s future looks bright because many banks in the world will adopt the XRP ledger before the current year’s end. The ‘XRP ledger’ is one of the technologies developed by Ripple to solve the problem of the international transfer for banks as an alternative to the SWIFT system. The XRP ledger is a distributed ledger network that can manage more than fifteen hundred transactions every second. It uses Ripple’s XRP cryptocurrency.
Mr. Garlinghouse has manifested confidence in Ripple’s future in the past, of course. One could argue that such is his job. At another interview held during the Money 20/20 conference, he remarked that (last year, in 2018),
“I have said it before that by the end of 2019, the xRapid ledger will be a significant tool in banks around the world. Before 2019 comes to an end, I believe that dozens of banks will embrace Ripple.”
Ripple’s adoption by banks is about to arrive
Ripple’s primary focus as a private company is to create blockchain-based liquidity solutions for banks, remittance services, and other financial institutions that remove most of the friction prevalent in the traditional methods for settling cross-border remittances. Ripple’s options are cheaper, much faster, and reliable.
One of those solutions is called xRapid, and while it can work for any institution in the world, it’s especially well-suited for banks that do business with emerging economies because it increases the accessibility to international transfers by lowering costs and improving transaction speeds.
The system sifts third-party options to settle a payment, looking for the ‘most competitive’ opportunity. Once it’s found, the sender’s local fiat currency is used to buy XRP coins which are then sold by the payment’s receiver for its local legal tender. The whole process can be executed in a few minutes only because Ripple’s network is fast and scalable. This is a significative improvement over the two or three days it usually takes to complete the same process through the conventional means.
Mr. Garlinghouse also had something to say regarding the company’s digital asset price: “The industry is nascent and speculation is what dominates the market action. In time, people will understand the unique use cases. Bitcoin will be a panacea as people suspected it would be. Bitcoin would solve different problems. There are different kinds of blockchains and ledgers being created daily.”
Will the future probe Mr. Garlinghouse, right? Will Ripple’s technology be in use by many banks this year? Will that affect XRP’s price in the cryptocurrency markets?
The GMT alliance
The cryptocurrency market’s legendary chaotic and volatile character doesn’t seem to affect Ripple as a private company very much. As the crypto verse does its thing, Ripple keeps securing expanding moves at every corner of the planet.
It recently acquired an important strategic partnership with Israel’s largest bank (which also happens to be the world’s 5th most important financial institution), GMT. Ripple’s presence in Israel aims to encourage the local financial industry’s momentum as well as fortifying the Californian firm’s presence in the region, which is already particularly strong in Saudi Arabia and other neighboring countries.
GMT published an announcement explaining how it shares an identical philosophy to that of Ripple’s and that such agreement allowed them both to reach combinedly favorable terms while they negotiated the new partnership’s details. Part of that announcement says that,
“After a precise and long discussion process, GMT has decided to choose Ripple. By working with Ripple and its partners, we would contribute to creating a global financial system using high-end values and technology that will be affordable and transparent.”
GMT’s happiness with the new partnership was made clear by the announcement. The Israeli bank explained that Ripple’s tech is a new way of doing things that will surely be adopted by many financial technology companies in the Middle East.
“GMT is joining establishments like CIBC, MoneyGram, AKBANK, MoneyGram and many others who have already started using the Ripple platform. With this partnership, GMT will be establishing its place in the forefront of the FinTech industry in Israel. It will also work hand in hand with some of the leading companies in the world.”
GMT hasn’t explained which of Ripple’s technologies it aspires to adopt expressly. It can be xRapid, xCurrent, and/or Ripple’s API. The first option is just a blockchain messaging system, while the second option is a full cryptocurrency-based solution that uses XRP as the mediating element.
The new partnership (as any progress made by Ripple) is something of a threat to SWIFT’s dominance in the world. SWIFT is the current industry standard for international transfers. It’s been around for about four decades, and its monopolistic status has not encouraged it to keep up with the times.
Thus, the system is severely outdated as it keeps using technology from the 1970s. That’s why it remains slow, expensive, unreliable. And that’s also why many voices in the industry have been calling for a better option to replace it. That option could be Ripple’s technology.
Another of Ripple’s partners in the region is Turkey’s AkBank. It’s one of the country’s largest banks, and it’s adopted xRapid as a solution for its international transfer business. It’s adopting xRapid after a trial period that lasted for more than a year.
Will XRP’s price move?
It will, but we need for the dust to settle down before we notice.
Ripple’s technology adoption, especially xRapid, which uses XRP directly, creates new demand and the new trading volume for Ripple’s XRP cryptocurrency. In a regular market, those two things would help the coin’s price to rise. But we’re not in a regular market. While we’ve seen charming green numbers over the last few weeks, it’s not clear that the cryptocurrency’s market protracted winter and bearish run is 100% over.
So Ripple’s hard work on securing new partnerships and gaining adoption for its technology and cryptocurrency will surely pay off in terms of market performance for XRP. But that improved performance will only become apparent when the whole market settles down.
That being said, let’s not forget that XRP was the world’s most profitable cryptocurrency in two consecutive years (2017 and 2018) which were, respectively the best ever year for cryptocurrencies and the worst possible year. In both scenarios, XRP was the best option for investors in crypto. This is an asset for all seasons, as the saying goes, and the new partnerships can only make it more attractive and improve its performance in the market.
Chances are that Mr. Garlinghouse’s optimism about Ripple’s future is well-justified. The company already has more than 200 partners scattered the world over and, on average, a new bank of the world jumps in the Ripple ship every week.
Recently, XRP overcame the all-important USD 0.4 price level. As we write this, it’s the third cryptocurrency by market capitalization, and it’s trading at USD 0.396610. It’s lost about 4% over the last 24 hours. However, it’s been up by 18% over the previous seven days, so that 4% is probably just a hiccup. Also, most technical analysis indicators are either neutral or in “strong buy” mode for this asset. So things look promising for Ripple as a company, but also for XRP as a profitable cryptocurrency.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.