How many financial institutions have implemented XRP
Why Japan's banks rely on the cryptocurrency Ripple
In the crypto world, the name Bitcoin is best known. But more and more money is now also flowing into the previously little-known crypto currency Ripple (currency abbreviation: XRP), whose market capitalization recently exceeded the US $ 100 billion mark.
For a short time, Ripple even passed Ethereum, the second largest cryptocurrency to date, after it became known that Japan's leading banks also wanted to test Ripple on a large scale. With a price increase of over 36,000%, Ripple was already one of the most successful cryptocurrencies in 2017 (source: Atlas).
What is Ripple?
Ripple is often referred to as a "bank coin" because the San Francisco-based company Ripple Labs offers blockchain solutions specifically for banks. Ripple Labs operates the RippleNet and at the same time issues the associated crypto currency Ripple (XRP). Ripple acts as a kind of bridge currency that can be exchanged for other crypto currencies as well as for FIAT money (euros, US $).
There are currently more than 38.7 billion Ripple in circulation, in the end it will be around 100 billion Ripple. In contrast to Bitcoin, Ripple are not "mined", instead 100% of Ripple were created by "Premining" by Ripple.
It is this fact that is followed with suspicion by many crypto experts, because behind Ripple there is a private company with the intention of making a profit. Although every user can open a Ripple Wallet (digital wallet), there has been a so-called freeze function since 2014, which means that Ripple accounts can de facto freeze - just like in the traditional banking system.
More than 100 banks rely on Ripple
In October 2017, Ripple was able to announce a milestone. More than 100 banks are now testing the Ripple Blockchain (RippleNet) and want to use it for their own purposes to offer fast cross-border payments. These banks include Credit Agricole, Santander, SEB, Cuallix, Currencies Direct, dLocal, IFX, Krungsri, RAKBANK, and TransferG.
The Mexican bank Cualix will be the first bank to also use the crypto currency Ripple (XRP) for transfers from Mexico to the USA.
Numerous Japanese banks have now jumped on the Ripple bandwagon. Above all, the Bank of Tokyo-Mitsubishi UFJ and Mizhuho, who were previously among Ripple's customers. Now the SBI Ripple Asia, a consortium consisting of 61 Japanese banks, wants to test Ripple in a pilot project.
Why do so many banks rely on Ripple
The big advantage of the Ripple Blockchain (RippleNet) lies in the Real-time Gross Settlement System (RTGS) protocol, which de facto enables cross-border real-time payments at very low fees (0.00001 XRP).
Transactions in the current payment system currently incur costs of over US $ 1.6 trillion annually. With the help of Ripple, banks should be able to save more than 30% of the costs per transaction.
Ripple is also very fast. Unlike the Bitcoin Blockchain, the RippleNet can currently process 1,500 transactions per second, making the Ripple Blockchain one of the fastest blockchains on the market. Transactions are usually confirmed within 4 seconds.
In addition, the Ripple service is of course available 24 hours a day, seven days a week - this means that transfers can also be made on public holidays and weekends.
Conclusion: More and more banks are joining RippleNet, the cryptocurrency benefits
The latest collaborations and partnerships with banks increase the chance that Ripple will be able to establish itself as the standard for banks when it comes to cross-border payments.
For the crypto currency Ripple, the influx of banks means a possible influx of new users, as every Ripple account owner currently has to hold 20 XRPs in their wallet in order to initiate transactions via RippleNet.
However, many observers are skeptical of the massive soaring Ripple. The idea behind cryptocurrencies is to replace banks in the long term and to abolish existing structures. However, Ripple wants to maintain these structures so that banks can continue to do business in the future.
It remains to be seen whether Ripple can hold its own in the long term. Stellar (non-profit organization) offers a similar concept, which, however, works without a central company and relies on the open source and community ideas. The bottom line is that speculating in cryptocurrencies remains very risky. High return opportunities are offset by high price risks, which can lead to the total loss of the money invested.
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