In a recent interview, Brad Garlinghouse, CEO of Ripple, said it best that "XRP is solving a payments problem and it's very efficient to do that." Ripple XRP is best encapsulated with the statement that Brad made simply because that is Ripple's main focus. The root of the problem that Ripple serves to answer is cross-border payments.
Ripple has shown time and time again that it can be the enterprise solution to be an efficient, speedy payments solution for large financial institutions and even become adopted by consumers alike. There are even videos on the web of a customer using a cryptocurrency card at Wal-Mart to purchase beer using Ripple XRP within a few seconds.
Solving the Cross-Border Payments Problem
Cross-border payments in 2016 passed more than $135 trillion, accounting for about 40% of global payments (download the Mckinsey report). In the Mckinsey report, it showcases that there is a strong case for cross-border payments, but it is without its shortcomings. The existing protocol is very vague. A global transaction will not be able to lock-in its fixed rate until the transaction clears or the funds arrive. Additionally, there may be multiple fees, delays, or even complications at each stage of the processing period of a transaction. The current systems in place are plagued with many things that could go wrong, which is why many global money transfer companies are looking towards a blockchain technology like Ripple to patch their problem to become an industry standard.
Blockchain technology opens many doors for financial institutions because of how fluid, secure, and quick it can be. I recommend giving this simple read from CoinDesk on What is Blockchain Technology a look. Simply put, blockchain technology is the answer for cross-border payments. The question is not IF global money transfer companies will adopt the technology, rather than WHEN. In recent news, American Express and Santander partnered with Ripple XRP to speed up cross-border payments between the U.S. and the U.K. by using the technology. If you are still curious what are the pros/cons of widespread adoption of Ripple XRP for big banks and global money transfer companies, I would highly recommend reading Ripple's Solutions Guide for a quick overview.
Recent major developments on Ripple XRP
- Ripple is being adopted like crazy in Asia. In recent news several South Korean banks have confirmed that they will be adopting Ripple XRP within their regular banking operations, which is huge news.
- To demonstrate how efficient speedy Ripple XRP is, 1 billion XRP was moved out of escrow and the transaction fee was only a measly $0.00003.
- Officially from the Ripple Twitter, "3 of the top 5 global money transfer companies plan to use XRP in payment flows in 2018. Even more in the pipeline."
Simply put, the craze for Ripple XRP is not unwarranted. I have friends or even relatives or even friends' of friends mentioning about Ripple that I would not otherwise think they would know about cryptocurrency. Currently, many exchanges are closed to the general public and people are scrambling to get their hands on some Ripple. Some people are even going to the extremes of even looking to eBay (I would advise not buying Ripple there) at marked up prices.
What I am trying to say is that it is exciting times for Ripple and it has been rightfully earned through all the hard work that the Ripple team have dedicated to the project. There is so much demand for Ripple XRP at the moment, which is huge momentum moving forward. The team behind Ripple have extensive experience in the banking industry, are highly qualified professionals, and are backed by some of the largest, iconic venture capital firms in the world. Simply put, I have my full faith in the Ripple team leading the charge of answering the cross-border payments problem.