Despite the epic XRP price crash in January, Ripple’s main partner in East Asia, SBI Holdings Inc, has increased its support to the company and to its digital currency, XRP. It even launched a digital asset exchange: SBI Virtual Currencies.
If we only focus on the news that a new exchange is now supporting XRP, it doesn’t look like a game-changing news.
But if you pay more attention at the release, you will notice two things:
- SBI Securities, a subsidiary of SBI Holdings, has four million brokerage accounts, and it is Japan’s biggest online securities company.
- XRP is the first crypto listed on the new exchange.
This is a very big deal. No financial service provider would make that decision lightly, because it is a long-term commitment. If something goes wrong, it won’t be that easy to change the whole system.
SBI CEO and Executive Chairman Yoshitaka Kitao explained the decision to Ripple, saying: “Not only does it have a clear use case, XRP is faster, cheaper and more scalable than any other digital asset. I strongly believe it will become the global standard in digital currencies.” (Source: “SBI Virtual Currencies to Exclusively List XRP at Launch,” Ripple, January 30, 2018.)
XRP can handle 1,500 transactions per second. The network can be scaled to process as many transactions per day as Visa or Mastercard. Bitcoin and Ethereum do not have that scalability.
So why are BTC and ETH the first cryptos listed on most exchanges? It leads to so many complications. Most investors looking to buy altcoins have to use Bitcoin as an intermediary, meaning that they’re wasting money on extremely high transactions fees.
Having XRP as the main cryptocurrency to other coins is a clever move by SBI. But it also goes a long way to establishing XRP’s credibility among the financial institutions in that part of the world.
“Today’s decision to make XRP the primary digital asset of SBI Virtual Currencies shows the utility, efficiency, and scalability respected financial institutions around the world see in XRP,” said Patrick Griffin, Ripple’s senior vice president of business development. “This is a critical step forward in our mission to build XRP liquidity and build an Internet of Value.”