Will Ripple’s Clients Switch From xCurrent to the XRP-Powered xRapid?
XRP investors are once again taking a hard look at Ripple’s direct impact on the digital asset.
In a new post on Reddit, user Blur93 asks why many Ripple customers continue to use the company’s cross-border payment solution xCurrent, instead of the newer XRP-based xRapid, which also powers international payments.
Ripple’s global head of banking Marjan Delatinne recently revealed 10 out of the 200+ financial institutions that are RippleNet members that are now actively using XRP for payments. Back in December, she explained why banks in particular will take longer to make the switch from xCurrent to xRapid.
“Just to make clear, no banking institution is using that [xRapid], because as you’ve probably heard about, the regulatory framework around the usage of digital assets is not very clear for banks. But payment service providers and some other financial institutions are less governed by these obligations.”
Ripple’s chief technology officer David Schwartz also talked about the company’s long-term strategy for xRapid adoption last year.
“As this system gets adopted by financial institutions, more and more payments will be able to be bridged by XRP the minute XRP has the liquidity to bridge them. Then, we just have to pick a strategic corridor (one with good volume but also fairly high costs in the traditional settlement space) and incentivize a huge pool of liquidity to XRP in that corridor. Then those payments will settle through XRP because the payment system is already ready for it.
This is a way to solve that chicken and egg problem. Next we hang more assets off the corridor we already built. Then companies that have to make lots of payments into various destinations in those corridors will find they can save money by holding XRP. Then traders will want to hold XRP because that’s the asset anyone paying into those corridors needs. And so on. Wherever liquidity pops up, payments will settle through that liquidity.”
Ripple currently has two xRapid corridors up and running: Mexico and the Philippines. More payment routes are planned for launch this year.
As for when the rest of Ripple’s clients will jump on board with xRapid, Reddit users highlighted a number of reasons why most of Ripple’s clients have not yet implemented the technology.