Ripple Announces Euro Exim Bank In London To Be First Official Bank Endorsing XRP And Five More Partnerships
XRP is the world’s third largest digital currency by market cap. This past week, XRP’s largest holder, Ripple, announced five new banking partnerships to bolster the digital currency.
XRP ended 2018 as the world’s second most valuable cryptocurrency. Although ETH has retaken the number two position in recent days, XRP remains one of the most promising digital currencies in the space.
Despite the large market cap, XRP remains controversial due to its ties to Ripple. Ripple arguably created XRP and remains the largest holder of XRP to this day. The company has tried to distance itself from XRP over concerns that it could be labeled a security. Regardless of the ongoing controversy, however, XRP continues to be one of the most widely-used digital currencies on the market today. After this latest announcement, XRP is more widely used than ever before.
Ripple has announced a series of partnerships with financial institutions that aim to use XRP as part of their operations.
One of the new partners is Euro Exim Bank, a financial institution with offices in London and St. Lucia. The bank’s operations include providing letters of credit for those in remote countries. Starting this year, Euro Exim Bank has announced plans to start using XRP to transfer money internationally.
Euro Exim Bank has presumably started using XRP due to its fast and secure transfers and low fees. XRP allows financial institutions to seamlessly transfer money worldwide without the cost and friction associated with a traditional financial transaction.
This is exactly how Ripple envisioned the future of XRP: the digital currency is designed as a fast and inexpensive source of liquidity for cross-border transactions. Thanks to XRP, banks would not have to maintain foreign bank accounts.
Instead, they could buy XRP with dollars or Euros and rely on local market makers to exchange XRP into local currencies. It removes unnecessary friction from international financial transactions while boosting speed and security – all with the help of blockchain.
Euro Exim Bank Won’t Hold XRP Itself
Euro Exim Bank will use XRP to make transactions more transparent and efficient. However, the financial institution will not hold XRP itself. Instead, the bank will rely on payment platform BitPay to manage all cryptocurrency operations.
This could change in the future as Euro Exim Bank becomes more familiar with XRP and digital currencies. The bank plans to launch an exchange service later this year that will allow users to convert fiat and cryptocurrencies, for example.
In the future, it’s expected that Euro Exim Bank will have its own liquid supply of XRP. However, in an interview with Fortune, a spokesperson for Euro Exim Bank declined to say whether the bank would purchase XRP from the open market or receive it directly from Ripple.
Ripple has traditionally used its stash of XRP to develop banking partnerships with financial institutions. Some have criticized this practice, however, because it essentially means Ripple is financing its operations using its pre-mined stash of XRP.
Four Other Institutions Have Signed Up For XRP-Related Deals
Ripple has already arranged XRP-based partnerships with four other institutions, including JNFX, SendFriend, Transpaygo, and FTCS. The goal with these partnerships is to help financial institutions optimize operations while also encouraging the widespread adoption of XRP.
Moving forward, Ripple will continue making an effort to expand partnerships over technologies like XCurrent and XRapid.
XCurrent is a blockchain-based messaging product used by banks worldwide. It is unrelated to XRP and does not use the digital currency in any way.
XRapid, meanwhile, is an XRP-based technology that aims to make international financial transactions cheaper for institutions. Last year, Western Union tested XRapid in a high-profile trial. However, the company discovered that XRP did not make the payment process any cheaper.
Despite the setback with Western Union, Ripple CEO Brad Garlinghouse believes there’s a bright future ahead for XRP-based technologies like XRapid.
“This is the year the wheat will be separated from the chaff,” said Garlinghouse in an interview with Fortune.
“Not many months ago, the media was saying no one will use XRP, which made for good skeptical headlines. Today, you can’t say that as people are starting to use XRapid because it’s better, faster and cheaper.”
Garlinghouse also added that Ripple has now partnered with over 200 financial institutions, and many of these financial institutions are ready to “flip the switch” and begin incorporating XRP into their operations.
Behind all of this is the fact that Ripple is the world’s biggest holder of XRP. As the value of XRP increases, so too does the value of Ripple. As more financial institutions continue to adopt XRP as a transaction medium, the value of Ripple can grow significantly. It remains to be seen, however, if the close ties between XRP and Ripple will cause regulatory headaches in the future.