Over recent weeks XRP investors became more and more frustrated at the level of FUD on XRP.
Putting things straight
Ripple (the company) have several platforms, 2 you might hear mentioned are xCurrent and xRapid. One of these requires XRP (the coin). That one is xRapid.
xCurrent allows banks and other institutions to instantly settle cross border payments with end to end tracking.
xRapid solves the liquidity problem. When settling a cross border payment due to fluctuations in currency and the need to prefund local currency accounts particularly in emerging markets, liquidity is needed i.e.the sending bank needs to cover both the funds in the receiving account upfront and reserve liquidity for fluctuations currency. XRP solves this problem by being instantly available to purchase/settle meaning the need to prefund and reserve liquidity is decreased.
Working in tandem xCurrent and xRapid provide a solution to both the speed and liquidity problems faced by cross border payments.
While its true that Ripple has many clients who are not currently using xRapid and consequently XRP, it doesn’t mean that the banks or whoever can reap all the benefits of Ripple without its use. All recent news: Moneygram, Cualix, Mercury FX, IDT Corporation are partnerships where the plan is to use xRapid and consequently its native asset XRP.
Why the FUD?
The past few months have taught that the above is generally not well known. I think the confusion, fear and newness of cryptocurrencies means journalists assume that the entire function of Ripple is XRP and it leads to confusing statements like this from the FT:
“But none of the banks who spoke to the FT had used XRP”
It is written like a big scoop, but it’s a bit like a Salesforce commentator stating he spoke to 12 Salesforce clients and none of them are using the Marketing Cloud.
These confusing statements then got echoed in forums across the world:
“Ripple may reach the moon… but XRP won’t because the banks don’t need it only Ripple Tech”
These kind of statements are completely misleading, but you can’t blame them when the supposed experts are so blinded by the cryptocurrency label that they don’t look beyond the coin to understand its actual use as part of an overall technology solution.
Hopefully this clears up a little of the FUD around XRP. While wiriting this I googled FUD. It means fear uncertainty and doubt. Next on my list is a full definition of a whale.