XRP cryptocurrency, a digital asset developed by FinTech startup, Ripple Labs, has been one of the largest cryptocurrencies by market cap for years now. XRP and Tether have fought for the 3rd spot this year, driven by the large following behind XRP and the Ripple ecosystem.
After all, this is a cryptocurrency whose goal is to be THE method for making international payments.
By now, most people in the crypto industry know what Ripple’s goal is. The company is looking to partner with banks, financial institutions, payment platforms, and alike, to offer them the use of its payment products. This comes at a time when the world is entering a digital economy, yet the legacy financial system lacks many resources to drive financial innovation.
Ripple payment products allow for instant international transfers of money. For example, Ripple envisions a world where you could go to a bank and request a transaction to your family member, friend, business partner, or other acquaintance on the other side of the world.
The payment that you would send would be in fiat. However, along the way, it would be transferred into XRP, instantly delivered to the recipient’s bank, and then exchanged once again into a fiat currency of their choice. By leveraging XRP as a “bridge currency,” Ripple has the opportunity to monetize core inefficiencies in the global payments industry such as speed and cost.
Basically, XRP cryptocurrency would allow the banks to remain relevant and useful in a world where instant international payments are becoming available through decentralized systems offered in the crypto industry.
With Ripple being one of the few digital asset companies that is trying to work directly with centralized parties, it has created an environment where its fate could depend on how financial institutions and regulators perceive XRP cryptocurrency.
So why has Ripple been silent throughout 2020 in terms of macro adoption? In December of 2019, many XRP enthusiasts believed big news was coming to fruition this year after Ripple announced that 2020 would be the “year of the digital asset.” This hype followed announcements in 2018, when Ripple CEO, Brad Garlinghouse stated that “Dozens of banks would use its cryptocurrency product in 2019.”
XRP Cryptocurrency / Ripple In 2020
XRP has had a tough existence thus far, and the same can be said for its parent company, Ripple. The coin and the firm were accused of being a scam time and time again, and Ripple has countless lawsuits under its belt regarding XRP being an unregistered security.
Former investors have been taking it to court for years, but the firm always managed to bounce back from these lawsuits, and prove that it is legitimate, and not a scam, as many have accused it to be.
For some time, it even seemed like the situation regarding Ripple and XRP might finally settle down. However, this lack of progress and notable developments for months at a time has re-awakened suspicion and mistrust in the company.
It’s not like Ripple and XRP cryptocurrency were never mentioned in 2020. However, most of it did not have much, if anything, to do with actual improvements to the coin, or Ripple’s systems and products.
Early in 2020, XRP was targeting Asian countries with its remittance systems, trying to help Vietnamese workers in Japan and elsewhere. They struggled with large fees and long waiting periods while sending their hard-earned money to those who needed it back home. Ripple was able to offer them technology that made such payments cheap and nearly instant. It also targeted South Korean companies, partnering with them in order to expand its ever-growing ecosystem, and get them to use RippleNet.
Which Bank Uses Ripple?
Aside from partnering with Santander, many investors had high expectations entering 2020 based on Ripple developments in 2019. According to a press release by the company in November 2019, Ripple had surpassed 300 customers on RippleNet, which is the companies network of banks and other financial institutions that are affiliated with Ripple in some capacity. Some of the top banks in the world have expressed interest in the payment infrastructure such as:
- BNP Paribas
- Japan Post Bank
- Banco Santander
- Royal Bank of Canada
- HSBC (Through Saudi British Bank)
- Standard Chartered
- Bank of Montreal
- DZ Bank (Through Reisebank)
- Sumitomo Mitsui Trust Holdings
- Canadian Imperial Bank of Commerce
- Nomura Holdings Inc
- Itau Unibanco
- PNC Financial Services
- Banco Bradesco SA
- Skandinaviska Enskilda Banken AB
The problem here is that these institutions don’t necessarily have to use XRP cryptocurrency. That has been one of the biggest debates in the XRP environment. RippleNet’s closed-source banking software is sold to financial entities, but RippleNet was previously splintered into 3 different product; xCurrent, xRapid, and xVia. xRapid is the only solution that actually leverages XRP. In an environment where regulations are still uncertain, many of these customers are using the non-crypto solutions. Banks can arguably settle cross-border payments with less volatility by using traditional fiat currencies opposed to XRP.
As for XRP Cryptocurrency itself, the coin has shown the worst performance in Q1 of this year.
Keep in mind that most of this data came in the pre-coronavirus period, as the virus truly started expanding in mid-March, as the quarter was coming to an end. However, while Ripple was successful in attracting new partners, and it even raised $200 million in a funding round — XRP had the worst performance among the top 25 largest cryptos by market cap.
The price spent most of this time moving sideways, and not even the partnerships, or the company’s growth in Mexico could fuel price growth.
Was There Any Development In 2020?
One report towards the end of Q1 stated that Ripple was working on a next-gen trading platform based on its XRP cryptocurrency. This was more of a tease than a real announcement, as Ripple did not really announce any relevant information on this project. Instead, it posted a job opening that suggested the development of something new.
The job description said:
“We’re looking for an engineering manager to lead and shape the team responsible for the ODL customer experience, integration into our next-generation trading platform and be a critical part of defining the future trajectory of On-Demand Liquidity and RippleNet.”
Another noteworthy revelation was made in an episode of Ripple Drop, which also came at a similar time. Back then, David Schwartz revealed that the firm is working on a feature that would allow firms to issue assets on the XRP Ledger, and have them tied to an external value of another asset or currency.
Basically, Ripple was working on a feature that would allow people to issue stablecoins, and potentially other cryptos that would be based on the XRP Ledger.
There was also some work on improving Xpring’s interoperability between XRP and Ethereum, which would be based on the Interledger Protocol (ILP). This was mentioned by a Ripple developer, Warren Paul Anderson, who spoke of the importance of creating a strong and stable bridge between not only XRP and ETH but also XRP and other Ethereum-based tokens, particularly ERC-20 tokens.
This matters for Ripple, as its own systems do not have a function that would allow for smart contract issuance or participation in the DeFi sector. Since 2020 appears to be the year of DeFi, it is hardly surprising that even Ripple wants to get involved in this aspect of the cryptocurrency industry.
After all, many other projects either started working on creating their own sub-category of DeFi, such as Binance, or they started issuing an Ethereum-based version of their coin with the ability to participate in the DeFi sector on Ethereum itself. These so-called wrapped coins, such as Wrapped Bitcoin (wBTC) also saw a lot of popularity this year.
Ripple in Q2 2020
As Ripple’s Q2 2020 report came out, it did not reveal much about the coin’s performance, other than the fact that the sales have increased from $1.75 million in Q1 to $32.55 million in Q2. Without much information, the industry was left to speculate whether the reason for this was increased demand ( possibly due to COVID-19 ), or if the company was simply dumping the coins at a faster rate.
Meanwhile, the firm itself, which previously revealed plans to pause its programmatic sales , announced that it planned to continue with this strategy. Ripple stated that their goal was to focus on XRP market liquidity.
In late July, Ripple made a surprising move by paying a massive $15.1 million to MoneyGram, a US-based money transfer company with which it partnered. Ripple noted that the payment was for ‘market development fees.’ MoneyGram itself defined this as the compensation for providing liquidity for Ripple’s ODL network.
The two seem to have a strong connection, as Ripple decided to buy a stake in MoneyGram back in mid-2019. The company invested $50 million in MoneyGram as part of their two-year partnership. Back then, the partnership did wonders for the price of MoneyGram’s shares, as the company’s interactions with the blockchain promised cheaper payments.
The partnership also came at just the right time for MoneyGram. The company was facing competition from newer rivals, and this partnership with Ripple gave it the edge it needed to stay afloat. At the time of the deal, MoneyGram stock nearly doubled, before selling off to conclude the year.
XRP Cryptocurrency Price
At the time of this report, XRP price currently hovers around $0.23769. Over the last 1 year, XRP is basically flat. The chart below outlines where price was in September 2019, vs price in September 2020. In comparison to price action over the last year, Bitcoin has grown +31.53%, and Ethereum has surged +107%.
The information above outlines some of the notable events for Ripple and XRP cryptocurrency in 2020 so far. The company has not done a lot of development, apart from vague hints that it might be working on various projects. There is a big difference between working on something, and then having that product/service make a significant impact. There still seems to be a disconnect between Ripple and XRP. There is no doubt that Ripple has the opportunity to become a powerhouse FinTech company, but many believe that Ripple is just using XRP to fund its operations.
Ripple allegedly invested quite a bit of money in partners who are helping it build liquidity, based on the reports that came out during the past nine months.
With September 2020 coming to a close, Ripple has another quarter in which it might potentially shine with a major update on its hidden works — provided that there are any. Doing something like that would reveal that Ripple did, in fact, make progress in 2020. Up until this point, Ripple’s statement regarding “2020 being the year of the digital asset” has shown little substance. Additionally, despite Ripple on-boarding “partners” from large banks, we have yet to see any synergy between these banks and XRP.