Ripple, the creators of a blockchain technology service that processes multi-currency, cross-border payments and money transfers, is having a banner year. And the company just launched a commercial version of its payment platform called xRapid.
xRapid, which uses the cryptocurrency XRP, is already being used by payment providers Mercury FX and Cuallix. It will also be used by the cooperative financial firm Catalyst Corporate Federal Credit Union.
Asheesh Birla, Ripple’s senior vice president of product, told CNBC, “I’m really excited to bring the product into the market at a time when there is a lot of skepticism about digital assets and their real use case. Here’s something where we’re finding a ton of value and providing a ton of value to our customers using digital assets to move money more efficiently.”
Prior to xRapid’s launch, Ripple partnered with three crypto exchanges in August to build what has been described as a “healthy” ecosystem of digital asset exchanges. The three exchanges involved are the U.S.-based Bittrex, Mexican Bitso, and Philippine Coins.Ph. The partnership enabled the xRapid platform to move between XRP, U.S. dollars, Mexican pesos, and Philippine pesos.
During the testing phase for xRapid, financial institutions (including money transfer giants, Western Union and MoneyGram) which took part in the pilot found that xRapid dramatically reduced the time and cost of cross-border transactions.
A Ripple press release stated, “Participating financial institutions saw a savings of 40-70 percent compared to what they normally pay expensive foreign exchange providers. In addition, an average xRapid payment took just over two minutes, compared to today’s average of 2-3 days when sending cross-border payments. The leg of the transfer that touches the XRP Ledger only takes 2-3 seconds with the additional processing time happening while the transfer moves across the intermediary digital asset exchanges and local payment rails.”
Despite those results, it is unlikely that big banks or other financial institutions in first world countries will be quick to adopt the xRapid platform. Birla said, “Banks worldwide are not first adopters of the xRapid product, but we are seeing a lot of financial institutions in general and payment providers moving forward with that product. We have a lot of business with payment providers.”
Without specifying countries or regions, Birla believes banks in emerging markets would be more likely to adopt xRapid: “In certain markets, I think banks will move faster towards leveraging digital assets, and so it really depends on the regulation and the local market,” he said. “Those countries have a lot more forward-looking regulation when it comes to digital assets, so I would envision that those would be the first bank adopters.”