Under the Hood of Ripple CEO Comments: Big Banks Using XRP-Based xRapid Payment Technology


XRP-powered xRapid technology is helping financial institutions around the world enjoy faster, cheaper payments. According to Ripple CEO Brad Garlinghouse, however, the best days for xRapid are yet to come: “major banks” are expected to start using xRapid by the end of the year.

XRP is one of the most promising digital currencies in the industry. Today, XRP sits in the number two position by market cap after moving past ETH last month.

Earlier this year, one XRP analyst became infamous for promising that XRP would rise to $589 by the end of the year 2018. That prediction looks outlandish even for the crypto space. Nevertheless, brighter days could certainly be ahead for the world’s second largest cryptocurrency.

In an interview from earlier this year, Ripple CEO Brad Garlinghouse announced that “major banks” would be using xRapid as a liquidity tool before the end of 2018:

“By the end of this year, I have confidence that major banks will use xRapid as a liquidity tool, this calendar year. By the end of next year, I would certainly hope we would see in the order of magnitude of dozens.”

The comments were made earlier this year, although they were recently dragged up by the team at AMB Crypto. It’s easy to make predictions like that in July. It’s harder, however, to make such a bold prediction with just 27 days left to go in 2018.

Today, crypto is struggling through a bear market. Crypto prices have plummeted across the board. It’s hard to imagine that XRP was sitting at $3 back in January. Today, it sits at around $0.30. Over the last few months, it has been announced that xRapid is already being tested by a small number of financial institutions. However, the so-called “major banks” have not yet adopted xRapid.

Instead, banks are using Ripple technologies like xCurrent. xCurrent is not powered by XRP.

As of December 4, no major bank has publicly announced that it is using xRapid. Yes, there have been a number of tests announced. However, all four customers signed onto xRapid are non-bank financial institutions using the platform for cross-border payments. They’re international remittance services attempting to use xRapid to reduce costs and boost speeds.

In other words, Brad Garlinghouse’s prediction is looking increasingly unlikely that it will come true.

Brighter Days Could Lie Ahead for xRapid

In order for banks to trust billions of dollars of transactions to a technology, that technology needs to be thoroughly vetted and tested.

That’s why optimists suggest that brighter days are just around the corner for XRP: we only have to escape from the bear market first.

Financial institutions seem to be positive about the xRapid product. They see potential in using xRapid to facilitate cheaper, faster international payments:

“With Ripple, we can source liquidity through XRP and complete the cross-border payments in seconds,” explained Paul Dwyer, CEO and Founder of Viamericas, as reported by AMB Crypto. “We believe that digital assets like XRP will play a key role in the future of cross-border payments, helping to safely address some of the structural inefficiencies of legacy settlement infrastructure.”

Viamericas is one of four financial institutions exploring the use of xRapid.

Ripple claims xRapid can help financial institutions reduce fees by 40% to 70%. xRapid can also settle transactions in less than 10 minutes – instead of the 2 or 3 days it takes to settle some payments made by legacy financial systems.

xRapid is based on the idea of liquidity pools: exchanges have partnered with Ripple to provide pools of liquidity. These pools of liquidity help xRapid facilitate cheaper, faster international payments. The four exchanges include Bittrex (for USD), Bitso (for Mexican Pesos), Coins.ph (for Philippine Pesos), and SBI Virtual Currencies (for Japanese Yen).

Thanks to these different liquidity pools, xRapid can quickly and easily settle payments between these four digital currencies.

How Financial Institutions Are Using xRapid

Financial institutions are using xRapid in different ways.

Viamericas, for example, offers a service known as Vianex that allows users to send money around the world using the Viamericas network. Customers enjoy competitive pricing and settlement times of three days with the current product; however, Viamericas could reduce fees and settlement times in the future by implementing xRapid. Viamericas is currently testing xRapid – they have not yet implemented it for customers.

IDT, meanwhile, is a telecommunications operator using xRapid to launch its “BOSS Revolution” product for unbanked populations. The goal of BOSS Revolution is to help “immigrants and the under-banked to conveniently and affordably communicate and share resources around the world,” according to the official IDT website.

Finally, Cuallix and MercuryFX are using xRapid to settle international payments, although it does not appear xRapid has been implemented in the customer-facing product at this time.

What Does the Future Hold for XRP, Ripple, and xRapid?

Ripple CEO Brad Garlinghouse’s prediction does not seem likely to come true. It seems unlikely that a major bank will start using xRapid as a liquidity pool before the end of 2018.

However, we’ve already seen xRapid used in a number of international remittance services. If the technology proves successful in these services, then it could revolutionize the industry. It would allow one of the above remittance services to offer substantially cheaper fees and faster money transfers than its competitors.

The future looks bright for XRP and xRapid – at least if you believe Ripple CEO Brad Garlinghouse.

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