XRP and Ethereum are becoming increasingly dominant in two distinct, early use cases for cryptocurrency, according to Ripple senior vice president of product Asheesh Birla.
At the recent Goldman Sachs Technology and Internet Conference in San Francisco, Birla said he believes it will be difficult for competing companies and crypto assets to outperform XRP in the world of cross-border remittances.
The same is true for Ethereum, says Birla, when it comes to decentralized finance (DeFi), which is an umbrella term for a crypto-based push to automate and remove middlemen from traditional financial services like borrowing and lending.
“I think that Ethereum is really interesting in that over $1 billion in loans is the DeFi ecosystem. So they really own that narrative. They have products and an ecosystem around that narrative.
XRP, the digital asset that powers the Ripple network in any destination where our products are live – XRP is the most liquid digital asset. And so for cross-border payments and remittance products, I think that XRP will perform really well in those use cases. But everyone has to find their niche and use case and build that ecosystem. And the further ahead you get, the harder it is to dislodge.
So for example, with cross-border payment, I think it’s going to be increasingly hard to dislodge XRP. And with DeFi, as the ecosystem expands it will be increasingly hard to dislodge Ethereum because it’s so liquid for those use cases.”
Birla touts Ripple’s remittance volume between the US dollar and Mexican peso, which is on the rise thanks in large part to the company’s partnership with MoneyGram.
“One of the things I’m really proud of at Ripple is last week over at Ripple, using XRP, we did 7.5% of the total US dollar to Mexico remittance volume over our product. So things are moving. We’re seeing more projects with real-world adoption. We don’t need more experiments. We want to see this change the world.”
According to Birla, Ripple remains focused on giving financial institutions an easy way to use XRP to move money across borders. If Ripple’s mission is successful, he says expensive correspondent banks will no longer be needed to establish trust when moving capital from one place to another.
“Programming money is really good and in that there’s no intermediaries. It’s freely moving and for our products at Ripple that’s a big deal because today, if you want to move money across borders, you have to have relationships in each country you want to move money in. You have to have a bank account. You have to have pesos in Mexico. And now what you can do with digital assets and XRP is you just trust the digital asset to move into that country. You don’t need that bank account and you don’ need that pre-funding in Mexican pesos. You leverage, and between crypto exchanges there’s no legal agreement. They’re just trusting that the value will move using a digital asset. And that’s a game changer.
You can launch in a new country in a matter of weeks. We’re trying to get it down to days but you can launch in a matter of weeks. Before that, you have to open a bank account. You have to wire money down there. You have to get the right kind of regulations. That’s a big game changer. Again you’re removing expensive correspondent banks in the middle and you’re replacing it. You used to trust them but now you’re trusting a set of computers and digital assets and I think that’s a big deal.”
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