Every day, businesses and consumers around the world send more than $ 75 billion in payments through a massive network of banks; Without this flow of money, everything simply stops. In an attempt to better serve banks, Ripple, the technology company based in San Francisco, has spent the last six years trying to reconnect this global system with what it calls an “Internet of value.”
In 2012, the company created its simplified and decentralized payment system using technology inspired by Blockchain. From the beginning, XRP was expected to be an important part of this. The company owns a large amount of XRP, and from the end of September last year to the beginning of January, the token recorded a surprising 1,300 percent increase in value, making the gains of the Bitcoin and Ethereum rivals look like lower case in comparison.
Most XRPs are kept in custody and can be sold only in limited pieces, to avoid the collapse of the market. There are 100 billion tokens and, according to the Ripple website, the company owns about 61 billion, with a value of $ 1.31 each today, January 26, that’s about $ 80 billion.
A big advantage for Ripple is that XRP, unlike Bitcoin, has a single defined approach: helping banks move cash from point A to point B more quickly and economically, especially across borders. . For example, the token could be used as a kind of bridge currency. Pesos in Mexico City could become XRP, which could later become dollars in the United States. Having this type of payment system could help banks avoid the hassle and expense of keeping money in different currencies in accounts at other banks.
But the problem is that many banks are moving away from the idea of using XRP. A group of current and former executives at seven global banks, some of which have partnered with Ripple, said there was a small chance that they would trust a cryptocurrency with their funds. The executives requested anonymity. According to a cross-border payments industry executive, there was no way they could use an instrument that regulators would never approve.
As soon as cryptocurrency regulations have taken a definitive path, banks and financial institutions can really start using XRP for cross-border payments.