Ripple XRP cryptocurrency product xRapid goes live for first time


Ripple’s cryptocurrency product for cross-border payments will go live for the first time with three financial institutions.

The San-Francisco-based financial technology firm said Monday that xRapid, which uses the cryptocurrency XRP to carry out international transactions in “a matter of minutes,” is now commercially available.

It will be used by payment providers Mercury FX and Cuallix, as well as cooperative financial firm Catalyst Corporate Federal Credit Union, Ripple said. Chief Executive Brad Garlinghouse was set to announce the news at the start-up’s annual Swell conference, a two-day event attended by industry representatives, on Monday.

“I’m really excited to bring the product into the market at a time when there is a lot of skeptcism about digital assets and their real use case,” Asheesh Birla, Ripple’s senior vice president of product, told CNBC.

“Here’s something where we’re finding a ton of value and providing a ton of value to our customers using digital assets to move money more efficiently.”

Ripple says there is a distinction between it, a private company, and XRP, which is the native digital currency of an open source network known as the XRP Ledger. There has often been confusion between the two.

Of the 100 billion XRP tokens in existence, Ripple owns 60 percent. But the company has kept 55 billion of the tokens locked up in an escrow account, to “create certainty of XRP supply at any given time.” That means it only has access to 13 percent of the digital currency, according to Ripple.

The development marks the first time XRP will be used in commercial application by financial services firms, and is seen as a critical milestone in Ripple’s bid to make cryptocurrencies and the underlying blockchain technology a part of the financial mainstream. Blockchain refers to the decentralized ledger that logs transactions and other information across a distributed network of computers.

The company’s business model also relies on deals with financial institutions, providing it with a core source of revenue.

Ripple had been testing the cryptocurrency product with Cuallix, Mercury FX and a number of other payment companies, including money transfer giants Western Union and MoneyGram.

But so far the start-up has not publicly announced any banks piloting xRapid, and has said that big lenders are unlikely to be the first to test or use it.

“Banks worldwide are not first adopters of the xRapid product, but we are seeing a lot of financial institutions in general and payment providers moving forward with that product,” Birla said.

“We have a lot of business with payment providers,” he said, adding that “in certain markets I think banks will move faster towards leveraging digital assets, and so it really depends on the regulation and the local market.”

The executive said that banks in emerging markets were potential contenders to use the cryptocurrency product in the future.

“Those countries have a lot more forward-looking regulation when it comes to digital assets, so I would envision that those would be the first bank adopters.”

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