Could Ripple Really Take on the Banks With XRP?

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KYRENIA, CYPRUS - NOVEMBER 8, 2018 Ripple ( XRP ) website on the smartphone display. Ripple is cryptocurrency and remittance network. - Image

Ripple, which is based in San Francisco is one of the biggest blockchain and cryptocurrency companies in the world.

It is the majority holder of XRP, a top 3 cryptocurrency by market cap and wants to get a share of the $2 trillion cross-border payments business.

However, Ripple also finds itself facing several lawsuits from XRP buyers, and XRP itself has fallen about 90% since its high in January 2018.

Why Does Ripple Polarize Crypto Enthusiasts?

Ripple sells a small amount of XRP each month to fund itself, which helps it remain a private company without needing to rely much on venture capital. Ripple has the flexibility to sell up to 1 billion XRP per quarter.

According to CNBC, Ripple is valued at around $20 billion, which is $5 billion more than Lyft, a ride-hailing start-up company currently valued around $15 billion.

What’s interesting is that Ripple owns over 60% of the total XRP in existence, and the currency itself was called Ripple and listed on exchanges with the same name.

This goes against the grain of cryptocurrencies, especially because XRP appears to be more centralized than some other cryptocurrencies such as Bitcoin and Ethereum. Both of the latter have been classified as not securities by regulators; however, XRP is still waiting for this distinction.

The company has also borne the burden of numerous lawsuits which were filed after a major drop in XRP’s value which led to investors scrutinizing Ripple’s relationship with the digital currency.

What Is Ripple’s Mission?

Despite setbacks, falling crypto prices and lawsuits, Ripple CEO Brad Garlinghouse believes that 2018 was a good year for the company.

This Tuesday, Ripple announced that it now serves over 200 customers and operates in over 40 countries. Also, for the first time, a bank has endorsed XRP. The endorsement came from Euro Exim Bank.

Ripple is targeting the global cross-border payment systems, currently dominated by Belgium-based SWIFT.

For Ripple, the advantage lies in providing solutions that help to make cross-border payments easier, faster and more economical by using blockchain.

Ripple is nowhere close to the 10,000-member network that SWIFT holds, but taking even a small percentage of that business would be enough for Ripple to thrive.

Global banks need the kind of solutions that Ripple provide but even Garlinghouse thinks that large banks like Citi, that make billions of dollars in payments may not be incentivized enough to use them.

He noted:

“I think Citi will be the last customer we ever sign up because it has the highest vested interest in not changing the status quo.”

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