Banks Are Finding a Friend in xRapid
Things are heating up for Ripple and XRP.
Ripple, the blockchain startup company, announced that its commercial product xRapid could be ready for use within the next few months.
xRapid has been in production for the past several years.
Sagar Sarbhai, the head of regulatory relations for Ripple’s Middle East and Asia-Pacific territories, stated that the company has been making significant progress with xRapid.
Here is what he had to say about xRapid while interviewed on CNBC:
I am very confident that in the next one month or so you will see some good news coming in where we launch the product live in production.
Earlier this year, Ripple’s CEO, Brad Garlinghouse, expressed his hope that XRP will be used by major banks by the end of 2018, with more participating in 2019. Ripple owns 60% of XRP’s volume.
Not only is the first cryptocurrency commercial product exciting, but the changes it will bring also keep investors intrigued.
What is xRapid?
xRapid is a product of Ripple’s. It gives payment providers a way to pay out internationally with a lower cost and liquidity through the cryptocurrency XRP.
Unlike xCurrent, a service of Ripple’s, xRapid will be able to use XRP to settle transactions.
In essence, it allows companies and customers to perform payments through xRapid’s blockchain software in minutes, without high costs.
Furthermore, it basically has zero chance of failing.
How Does xRapid Work?
Let’s say you want to send money to a friend in Mexico.
You would use xRapid, have the payment converted into XRP tokens, and it would be sent to Mexico in seconds.
Once it reaches Mexico, the XRP tokens would then convert to pesos in the hands of the recipient.
The payment would take minutes, with almost no fees.
Now, if you were to send money to someone in Mexico without xRapid, it would take days and run you a fat fee just for the transfer.
To sum it up, xRapid will use XRP as a currency, bridging others together and creating a space for quick, cost-effective foreign exchanges while also providing liquidity.
What Changes Does xRapid Bring?
xRapid would bring several changes.
First, xRapid would completely transform how banks and other institutions transfer money. There would be no need for nostro accounts or bank accounts pre-funded with foreign currency.
You would simply send the funds through xRapid, convert them to XRP, and then convert them to the recipient’s currency in seconds. That makes the customer happy and saves the company time and money.
Some have already tested the product and have made up to 70% in savings.
xRapid will also affect the volume of XRP, the cryptocurrency used in the exchanges. Studies show that if xRapid were able to handle 1% of international bank transfers, XRP’s daily volume would multiply by over 250.
The biggest change xRapid could bring forth is the cooperation between centralized banks and decentralized cryptocurrencies. Instead of seeing cryptocurrencies as “bad,” regulators and policymakers are taking a better look at them and seeing the benefit they can provide to the people.
xRapid also gives people a chance to use blockchain and cryptocurrency in their everyday lives, promoting trust in the new technology.
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What’s the Reaction to xRapid?
The news on xRapid has been met with much anticipation, given the benefits it could bring to international payments.
The first big reaction was shown through XRP’s growth. In this past week, the cryptocurrency has grown over 100%.
XRP used to be one of the worst performing cryptocurrencies. It is now the third biggest crypto by market capitalization.
Several companies have already signed on to use xRapid when it's released. Ripple states that smaller banks and startup companies will experience big savings when using its product.
Coins.ph, Bitso, and Bittrex are all cryptocurrency exchanges that intend to use xRapid’s low-fee cross-border payments. SBI Virtual Currencies, SBI’s newest crypto exchange, is also preparing to use xRapid.
Zip Remit is also going to use xRapid. This isn’t much of a surprise, as the Canadian company has supported XRP for some time.
Cuallix is joining xRapid as well. Cuallix is a company based in America, Mexico, and Hong Kong that provides a way for people without banking to make international payments. Utilizing xRapid’s cheap and quick payments will help this company greatly.
Add IDT Corporation, Cambridge Global Payments, and MoneyGram to the list of future xRapid users as well.
Mercury FX, a company in London, had a trial run of the product and noted it “can lower liquidity costs & increase payment speed and transparency.” It’s planning to use the product when it is released.
With xRapid, it seems like we will be seeing more banks cooperating with Ripple, using XRP to expedite their transfers at a lower cost.
This may be the beginning of a consistent union between banking and cryptocurrencies.