Three Companies Are Already Using Ripple’s xRapid and XRP for Commercial Clients, According to Event Announcement
Ripple’s SWELL event is underway throughout the week. We already have the first big news release from the event as it was revealed that three companies are already using Ripple’s xRapid and XRP for payments. (more on the SWELL Event and Bill Clinton's speech)
“After a series of highly-publicized pilots, three companies are now making commercial use of Ripple’s xRapid product,” reports CoinDesk from Ripple’s SWELL conference taking place this week in San Francisco.
xRapid is a Ripple technology that uses the digital asset XRP as a “bridge currency” to facilitate cross-border payments. Using XRP and xRapid, corporations and financial institutions can lower costs when moving money worldwide. Ripple is marketing xRapid as a way to reduce costs and increase the speed of international payments by boosting liquidity.
Ripple CEO Brad Garlinghouse took the stag at the conference in San Francisco to announce that three companies, including MercuryFX, Cuallix, and Catalyst Corporate Credit Union, were using xRapid and XRP for commercial purposes.
This news is a big deal: it’s the first time these companies have confirmed commercial use of xRapid.
MercuryFX is an international payments provider, while Cuallix facilitates remittances between the United States and Mexico. It was no secret that either company was using xRapid: both had announced test pilots of the technology earlier this year. However, the fact that they were already using xRapid for commercial clients was previously unreported.
Catalyst Corporate Federal Credit Union, meanwhile, provides a range of financial services to around 1,400 credit unions, with a particularly large presence in the southwestern United States. It was previously unreported that Catalyst Corporate Federal Credit Union was working with Ripple whatsoever.
Other major names associated with xRapid in the past have included Western Union, MoneyGram, Viamericas, and IDT. All of these firms have run tests using xRapid, but it seems none are currently using xRapid for commercial purposes.
“We are still working on next steps [with some of these companies],” explained Ripple SVP of product Asheesh Birla in a statement to CoinDesk.
XRP has been on a tear this past week in response to all of the positive news from Ripple. Seven days ago, XRP was sitting at a price of around $0.44 with a market cap of $17.7 billion.
Today, XRP is sitting at a price of around $0.58 with a market cap over $23 billion. XRP continues to be the world’s third largest cryptocurrency by market cap, although it has surged into the second position at various points over the past week.
Expect Cheaper, Easier Cross-Border Payments in the Future
The payment technology used to transfer money from the United States to Mexico hasn’t changed in half a century, according to Ripple XVP of product Asheesh Birla in a statement to Coindesk:
“Today if you want to move money, let’s just say into Mexico…the ways to do it were built in the 1960s. it really hasn’t changed. You have to open up a bank account in Mexico, and you have to deposit pesos in that bank account, and then you have to pay out locally. And that whole process sometimes takes weeks, and the setting up of a bank account is a whole treasury operation that takes months to get going.”
Ripple’s xRapid technology, meanwhile, processes international payments using XRP. The sending party puts fiat currency – like the Mexican Peso – into a crypto exchange and converts it to XRP, and then that XRP gets converted into the desired fiat currency at its final destination – say, the US Dollar.
Ripple has already announced partnerships with three exchanges that will facilitate this international transfer process, including Bittrex (for US Dollars, Bitso (for Mexican Pesos), and Coins.ph (for Philippine Pesos). Market markers on these exchanges will act as counterparties for fiat-to-XRP trades, and those market makers have no affiliation with Ripple.
One source claimed that MercuryFX’s new xRapid technology cuts international money transfers from two days to a two minutes. Another source compared the new xRapid technology as like a bullet train replacing someone pushing around a wheelbarrow.
xRapid is Different from xCurrent
over the past few years, Ripple has generated headlines for a number of banking partnerships. However, many of these banking partnerships have used Ripple’s xCurrent technology, which is entirely separate from xRapid.
Both xRapid and xCurrent facilitate cheaper, more efficient transfers among banks and corporations. However, xRapid uses the XRP digital token while xCurrent does not. Ripple insists that xCurrent was built to get banks started with fiat transfers, with plans to introduce them to fiat and crypto transfers in the future.
How Will Ripple Monetize xRapid?
Three banks have now confirmed that they’re using xRapid for commercial transactions. However, it’s not yet clear how Ripple will monetize xRapid.
Fueling speculation is the fact that Ripple’s partners have made statements like this is response to whether or not they’re paying Ripple:
“We've been using the XRP ledger on the basis that the money's not important right now. It's the dream that we're chasing that is.”
That statement comes from Alastair Constance, founder and director of MercuryFX. Ripple, meanwhile, claims xRapid is part of the RippleNet suite of products that is sold to financial institutions.
Ripple’s profitability is a big concern: Ripple continues to have the world’s largest stash of XRP tokens. They reportedly sell those tokens to the market regularly to generate revenue.
There are also concerns about the connection between Ripple and XRP, including concerns over whether or not XRP is a security. Part of the confusion is that the value of XRP – a decentralized digital token – is expected to rise based on the decisions of Ripple – a centralized organization.
“The xRapid product leverages XRP, so if you are doing a million dollars…through xRapid, that is a million dollars of XRP that you would need.”
As xRapid adoption increases, it’s expected that the value of XRP would continue to rise – although institutions that use xRapid are not required to hold XRP themselves.
Overall, Ripple CEO Brand Garlinghouse is extremely optimistic for the future of the company. Earlier this year, Garlinghouse predicted that “dozens” of banks would adopt xRapid by the end of 2019. Although Ripple might not meet that goal, it’s encouraging that at least three banks are now using xRapid for commercial purposes.