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Brad Garlinghouse, chief executive officer of Ripple Labs Inc.
Ripple’s cryptocurrency product for cross-border payments will go live for the first time with three financial institutions.
Two weeks ago, Sagar Sarbhai, head of regulatory relations for Asia-Pacific and the Middle East at Ripple, told CNBC he was “confident” that news of xRapid’s commercial application would be announced “in the next month or so.”
And Ripple’s Garlinghouse has also said he believes “dozens” of banks will use XRP by the end of 2019. The firm’s xRapid product is primarily targeted at banks transferring money into emerging markets.
The price of XRP soared in value in the days following CNBC’s report about Ripple edging toward a live rollout of xRapid. It also found support from news that U.S. bank PNC had joined its clientele of banking partners. However, it subsequently plummeted following that spike in value.
The cryptocurrency’s price is currently well off a record high above $3 it notched at the start of the year — it is now worth almost 60 cents. Nevertheless, that hasn’t stopped it from maintaining its position as the third-largest digital currency by market capitalization — a figure worked out by multiplying the price by outstanding tokens in circulation — with a market value of $23.3 billion, trailing behind rival cryptocurrency ether’s $23.9 billion market cap.
Speculation and volatility in the virtual currency market has garnered the attention of regulators, particularly in China and South Korea. Both of those countries have banned the controversial practice known as an initial coin offering, where blockchain ventures sell new digital tokens in exchange for cryptocurrencies like bitcoin and ether, or cash.
“If the industry in general got more focused on customer problems and less about speculation, I think the entire industry would really be a heck of a lot better,” Birla said.
How it works
Ripple says xRapid uses the digital asset as a kind of “bridge” between currencies, allowing payment providers and banks to process faster cross-border transactions.
For example, a bank might want to process a transaction from U.S. dollars to Mexican pesos. According to Ripple, this process normally requires pre-funded local currency accounts in order to take place. Ripple claims that process can be bypassed by converting the U.S. dollars into XRP tokens through a cryptocurrency exchange, moving the money overseas, and converting it into Mexican pesos via a local digital asset exchange on the other end.
The fintech firm has partnered with many banks, but those partnerships have so far been primarily focused on the testing and use of its xCurrent product, which is used by banks to track information about a payment in real-time and without a counterparty in order to speed up the process of settlement.
Santander for example has used its blockchain-based product to create a money transfer service called One Pay FX. The platform lets users make same-day international transfers, according to the bank.
Figures released by Ripple on Monday show the firm doubled the number of customers signed up to its network in the third quarter from the same period in 2017 — it currently has more than 120. Its business partners are located across more than 40 markets.
“I think we’ve had a better year,” Ripple’s senior vice president of product Birla said. “We’ve had a lot of adoption, our sales team is out there now closing over two deals per week over our suite of products, and so it’s just been a better and really a momentous year for Ripple.”
Ripple also said its total staff headcount had almost doubled, nearing 300 employees. It did not, however, disclose any financial figures.