● xRapid will be using XRP to process international money transfer transactions
● Three financial firms will be using xRapid, according to reports
● The announcement was made during the annual Swell conference
xRapid is now available commercially and it is poised to enter the financial services market very soon. Ripple’s cryptocurrency product is going live with three financial firms based on an announcement by Brad Garlinghouse during the annual Swell conference. The San Francisco-based fintech also said on Monday that the product will be utilised by Mercury FX, Catalyst Corporate Federal Credit Union and Cuallix to carry out international money transfer services.
A critical milestone
In an interview with CNBC, Ripple Labs’ Senior Vice President of Product Asheesh Birla said: “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." Birla adds that the product will be able to “move money more efficiently”.
Ripple representatives note that there is a difference between xRapid and the token XRP as the latter operates in an open source network while xRapid is a private company. The fintech has been taking a lot of heat both from the media and the courts regarding its ownership of XRP tokens. The company currently owns 60% of the token according to reports, and that 55 billion XRP are said to be locked up. Ripple says that the company only has access to a mere 13% of the tokens and the rest of the tokens are kept to ensure that supplies are available at any given time.
Despite the bad press XRP has been getting, xRapid’s commercial application is still something to celebrate, according to the firm’s executives as this is part of the company’s bid to make cryptocurrencies and their technology more mainstream.
Emerging markets likely to leverage digital assets
The company has been testing the product with Mercury FX, Cuallix and other money transfer services the likes of Western Union and MoneyGram. However, Ripple Labs added that banks are not the first to pilot xRapid. Birla said that the product will be used by payment providers instead. Ripple has a market with payment providers noting that only banks in certain markets will be using digital assets very soon. Birla also told reporters that it “depends on the regulation”.
Emerging markets are potential contenders to use xRapid according to reports, as said economies have already put forward-looking regulation in place. The banks in emerging economies will be the first adopters, says Birla. Although the adoption of xRapid is not as swift as observers in the fintech industry have expected, Garlinghouse is very optimistic about the product. In an interview, Garlinghouse said that dozens of banks will be using their digital token before the end of 2019.
How it works
xRapid works as a bridge between different currencies. It allows cross-border payment providers and other financial institutions to process international money transfer services faster. If a bank wants to process a currency transfer from Euros to Mexican pesos, the platform will translate the Euro amount to XRP to bypass conversion until it reaches its destination.
Find out more about the role of cryptocurrencies in international money transfers here.
