The organizers of Ripple's two-day Swell conference in San Francisco did not lose their head when they called the final panel of the "The 800-Pound Gorilla" event.
The question of the adoption of crypto assets was certainly on many of the minds of the participants, especially since Ripple's CEO, Brad Garlinghouse, announced the day before that xRapid, the product of the company, exploits the XRP cryptocurrency for "on-demand liquidity" in cross-border payments, is now used in commercial payments by three companies.
At the time of the event, the total value of all outstanding XRPs was worth approximately $ 21 billion, with each asset trading around $ 0.50. The XRP had previously traded at $ 3.50 at the start of the year (with a market capitalization of $ 130 billion) and around $ 0.20 at the time of its inaugural Swell conference of last year.
Representatives of two of the companies in question were in the panel: Brad Ganey, COO of Catalyst Corporate Federal Credit Union and Nicolas Palacios, CFO of Cuallix. (The third company that uses xRapid commercially is MercuryFX.)
They were joined by Kwon Park, head of business development at Bittrex, a cryptocurrency exchange that worked with Ripple to facilitate fiat-to-XRP transactions at the heart of xRapid; and Alfredo O & Hagan, SVP of payment services at IDT, a telecommunications company that provides international payment services and has tried xRapid in the past.
As might be expected from a group that uses cryptocurrencies in their activities, the speakers were mostly enthusiastic about the use of digital and cryptographic assets in cross-border payments.
"There's a big difference" between xRapid and traditional systems like SWIFT, said Palacios, in terms of "cost efficiency, time efficiency, transparency" and customer experience.
"We see a great competitive advantage for this progress," said Ganey of xRapid, given that the transmission of international cables is expensive, takes a long time and "is not the cleanest process". Rather than thinking of service as a totally new or alien technology, he added, it might be better to describe it as "a digital cable: it's a faster cable".
Garlinghouse may have captured the unsatisfactory nature of the charging infrastructure on the first day of the conference when he said that the fastest way to transfer money from Kuwait to San Francisco was to put a suitcase in cash and fly it there.
Replacing this system with cryptographic solutions is not free from obstacles, however, as O & # 39; Hagan emphasized:
"We are regulated entities so we have to make sure all the pieces are in place."
The process of "education" – a word often repeated on the panel – does not only concern regulators, but internal risk and compliance management personnel, as well as banking partners.
"The corporate risk committee had to be convinced," O & # 39; Hagan said, continuing, "The first time we mentioned, cryptocurrency we got this" (he mimicked a loud, exasperated sigh). IDT, he said, saw up to a quarter of its international payment flows completed in cryptocurrencies, including bitcoin, litecoin and "all that is best in that particular market" in terms of the exchange rate.
Ganey, however, said that as far as regulators are concerned, "at this point we did not meet resistance".
A previous panel has provided some reason for optimism on the regulatory front. Michael Didiuk, a member of the Seattle-based Perkins Coie law firm, said he did not believe that the US Securities and Exchange Commission (SEC), where he spent eight years, would consider the security of the XRP.
"I think it's a currency," he said, although he added that a surprise decision to the contrary (for any cryptocurrency that the market currently treats as a currency) "will have knock-on effects – no pun intended".
However, regulatory uncertainty and internal pushback are not the only obstacles to the adoption of mass cryptocurrency in international payments. O & # 39; Hagan said: "If you look at xRapid as a hub, you need rays, you need entities that will allow the last mile […] The more companies join, the better we are all. "
In other words, part of what is holding back adoption is the lack of adoption.
Ganey, however, does not seem to be worried about this, joking in reference to other financial institutions:
"I would be perfectly in favor of them staying on the sidelines for a while."
Image by David Floyd for CoinDesk