Ripple Shalt Not Go Gentle Into That Good Night: xCurrent Goes Consumer in Japan As xRapid Seeks Banking Partners
Ripple Labs and CEO Brad Garlinghouse are on a double offensive after, by their standards, a headline-lacking month. SBI Holdings, a Tokyo-based partner of the San Francisco-based fintech startup, is set to launch mobile payments app MoneyTap in Japan. Meanwhile, the company is pursuing an expansion of the use of Ripple XRP among banks–an expansion from zero, that is.
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Ripple Wants a Slice of the Japanese Consumer Cake
SBI Ripple Asia, a subsidiary of giant SBI Holdings and partner of Ripple Labs, has announced the launch a mobile payments app, MoneyTap, in Japan, with possible plans to expand service across the Asia-Pacific region.
— 沖田 貴史 T.OKITA (@OKITATakashi) September 12, 2018
MoneyTap is expected to use xCurrent to process blockchain-based transactions, avoiding the potential pitfalls of Ripple XRP. xCurrent is the product of choice of Ripple’s commercial partners.
Not Forgetting Its Legacy Customers, the Company Wants to Eat Finance Sector Cake, Too
As reported yesterday by Bitsonline’s Ian Edwards, Ripple’s head of regulatory relations for Asia-Pacific and the Middle East, Sagar Sarbhai, told CNBC he was confident that banks would start using xRapid–fueled by the startup’s native currency XRP–soon.
Though the company has over 120 partners in the financial services sector, all are using xCurrent, shunning XRP due to concerns over price volatility and potential regulatory complications.
Rapid Currently on the Banks’ Nose, but Currents May be Rapidly Changing
Despite claiming to offer “one frictionless experience to send money globally”, Ripple actually has a number of frictionless ways to send money around. Banks have preferred xCurrent because it allows them to use the benefits of Ripple’s fast transfer services without becoming entangled in regulatory uncertainty surrounding XRP.
Sarbhai suggests that may be changing, arguing:
“…policymakers, regulators are seeing that there is a strong benefit that digital assets and cryptocurrencies bring in.”
He describes XRP as acting as a “bridge” between fiat currencies. The executive’s claims repeat Garlinghouse’s June assertion that banks would begin to migrate to xRapid by early 2019.
Twin Pillars of 1970s Heydayism, Banking and Media, Still Getting Crypto Wrong
The banking industry’s fear of crypto’s price volatility is as misguided as the oft-repeated notion that crypto can never replace fiat because it is volatile. Cryptocurrency may never be–and may never need to be–the currency of payment or the currency of receipt in a transaction.
Being the currency of settlement is not what makes blockchain-based currencies useful. Speed, low transaction costs, and the elimination of a trusted intermediary are their primary advantages over fiat. (All of these features are highlighted in Satoshi’s whitepaper.)
The use of XRP in cross-border transactions would make sending one fiat across the world to be turned into another virtually instantaneous, while also offering on-demand liquidity. XRP in that scenario is merely the mechanism through which that transfer occurs.
Cryptocurrencies are not volatile to the extent that the value of XRP, with a network capable of scaling to transact at twice the speed of Visa, is going to markedly change in the middle of a split-second fiat-fiat-via-XRP transfer. Indeed, a standard fiat-to-fiat transfer between banks over a few days is similarly subject to exchange rate fluctuations–a fact apparently forgotten by crypto deriders.
Is a sub-one second fiat-crypto-fiat cross-border transfer really likely to pose greater volatility risks than a two-to-three day fiat-fiat deal? At the Milken Institute Asia Summit 2018, @CoryTV told the crowd:
“Most of the industry still moves money like it’s 1973. Ripple allows banks, payment providers and remittance companies to move money across borders in seconds.”
–@CoryTV at @MilkenInstitute #MIGlobal Asia Summit 2018 pic.twitter.com/ByuN83c0bw
— Ripple (@Ripple) September 14, 2018
Have your say. Can cryptocurrencies act as bridges between fiat currencies more effectively than traditional transfer methods, without posing unmanageable volatility risks?
Images via Pixabay