Ripple has been one of the leading altcoins today. After announcing its xRapid product, it was able to capture the second spot in terms of cryptocurrencies based on market cap. What made Ripple’s XRP stand out is that it targeted institutions. It wanted to make cross-border transactions cheaper. It has been making its move in different parts of the world even making its way to countries that are reliant on remittances.
With XRP, it becomes possible to make cross-border transactions cheaper and faster. Ripple has partnered with banks such as Santander and institutions such as Western Union. However, JP Morgan also made its own digital currency. Could it be possible that Ripple’s XRP is going to lose some of its partnership?
JPM Coin has received some harsh criticisms from different members of the crypto community including Brad Garlinghouse who is currently the CEO of Ripple. Among the things that people think lacking in the JPM Coin is its lack of interoperability. It is basically a centralized cryptocurrency that will only be used internally. In addition to this, it is pegged on the US dollar making it a stablecoin.
However, this could potentially be a start of something big. It could mean that banks will most likely make use of blockchain technology in the future.
Future of Cross-Border Transactions
SWIFT, has existed for so long even before Ripple came into existence. However, it was forced to upgrade in order to compete with what Ripple is offering.
Aside from JP Morgan, IBM has also launched a blockchain-based payment solution. It offers the same type of real-time payment for different financial institutions which could potentially mean that it can compete against Ripple. However, for IBM, it is going to make use of Stellar’s XLM. Today, Stellar is considered by many as one of the top options when it comes to cross-border solutions.
What makes Ripple stand out is the fact that it already established its name ahead of all of its recent competition. It is probable that IBM doesn’t exactly pose a serious threat to Ripple today.
XRP As a Security?
One of the things that Ripple has been struggling with is to get a clarification from the US Securities and Exchange Commission that XRP isn’t a security. Both Bitcoin and Ethereum have been cleared at this point by the agency. However, Ripple’s XRP still floats in a grey area.
Ripple CTO David Schwartz explained recently during the “Blockchain Beyond the Hype: The Ripple Effect” session that XRP is not a security. Schwartz mentioned that it is imperative to know the history of both XRP and Ripple in order to figure out that it isn’t exactly a security. Schwartz mentioned that XRP was built first before Ripple.
He said that “XRP originated when Artur Britto, myself, Jed McCaleb, and Chris Larsen built the XRP ledger back in 2011, 2012. The original founders who built that system gifted a bunch of XRP to Ripple to have the company work and build an ecosystem around it”.
And based on the Howey Test, Ripple should’ve been made first before XRP if it is considered a security. Could this mean that we are going to see more XRP to solve cross-border payment concerns in the future?