Ripple thinks that dozens of banks would have to use cryptocurrency next year though banks have indicated the time and again that they will not accept any digital currency. Its CEO, Brad Garlinghousse, thinks that he has got enough reasons to believe that banks would have no alternative but accept virtual currencies. One of the reasons is that blockchain product required the new age currency to work with. However, the central bank of any country should be ready to allow the commercial banks to accept them.
Solution for Cross-Border Money Transaction
Ripple indicated that it is engaged in creating a solution so that cross-border money transaction could be allowed between banks. The objective is to not only ensure faster way but also offer cheaper service compared to the existing system. The solution would be based on blockchain technology that strengthens multiple digital currencies. Aside from that, it has several products based on blockchain technology, and one among them is xCurrent. The company disclosed that a number of banks are currently using it. This included Santander. The product allows the information is checking processes that are needed to make quicker transactions. However, this does not need any digital currency to work.
The company is also having another product called as xRapid. The objective of the solution is to focus on institutions that have a presence in emerging economies. Its contention is that payments required the pre-funded local currency accounts throughout the globe. The company explained the process of sending money through its xRapid that would be converted into XRP so that it could move faster. Once this is done, it would be converted back into any cryptocurrency that is needed at the other end.
Ripple cited that XRP is having only a four-second transaction time suggesting that the process would be quicker than expected. Though there are other companies like Moneygram and Western Union, they are trailing behind xRapid. Significantly, they have not made any commitments to make the transactions in quick time. Therefore, the CEO thinks that a large number of institutions would have to use its blockchain products before the end of the next year.
According to a CNBC report, Garlinghouse told media during an interview that “I’ve publicly stated that by the end of this year I have every confidence that major banks will use XRapid as a liquidity tool.” He was in Europe fintech conference in Netherland when he aired the views.
Demand for XRP to Increase
The XRP digital currency is a publicly traded one and is traded around 67 cents recently. The current year has witnessed a number of digital currencies price witnessing a significant drop after the regulators have started tightening their noose. That is primarily because of unimaginable growth in most of the virtual currency prices last year.
However, there is an expectation that once bigger institutions started using Ripple’s product, demand for XRP token would increase due to large-scale transactions. That could also boost the acceptance level among the enterprises as a means of currency.