Ripple (XRP) Adoption: SBI Virtual, IDT Corp & Mercury FX
Ripple (XRP)–Lost in the bloodbath of the continued market downturn, Ripple has quietly been gathering a string of partnerships and announcements testifying to the increased usability and adoption of XRP. Last week it was announced that IDT Corporation and Mercury FX would be joining the growing list of companies to use XRapid (the Ripple platform that utilizes XRP directly for transactions). Earlier this week SBI Virtual Currencies, a new exchange funded by Japan-based SBI Holdings, broke waves in the cryptosphere by revealing that it would support XRP as the sole digital asset available upon launch.
Both announcements provide significant value to Ripple, even if the short-term price fails to reflect the growing adoption.
IDT Corp, Mercury FX & XRapid
When the price of Ripple stagnated at 0.20 – 0.25 USD for a large section of 2017, the primary fear for investors was negligence of the XRP currency. Ripple, the parent company behind XRP, had developed usable technology to improve bank to bank transfers, but there was concern that XRP would not be needed for liquidity in transactions. These fears were further expounded with the announcement of the American Express partnership in November 2017. While the union represented a significant step forward for Ripple adoption in the financial industry, it was also an example of a company utilizing Ripple while neglecting the XRP currency. Some investors and pundits went as far as to label XRP a “scam” currency, designed to boost the profits and pockets of Ripple founders but eventually be valueless to the average investor.
Ripple has done an unheralded job of vindicating these fears within the last month. The XRP parent company has proven its commitment to expanding partnerships with companies seeking to use the currency directly in transactions. It started in October 2017, with Cuallix becoming the first financial institution to utilize XRP for liquidity in cross-border transactions (and subsequent confirmation that the implementation has led to cost-saving). MoneyGram kicked off 2018 with the most significant XRP-partnership to date, coinciding with Ripple’s CEO Brad Garlinghouse hinting at two more household-name money firm partnerships in the works.
Which brings us to the recent union of IDT Corporation, Mercury FX and XRapid. IDT Corporation, a telecommunications company based out of New Jersey, is another payment provider looking to XRP to improve upon the efficiency and cost of its services–a move that is certain to help the bottom line and hopefully allow the company to pass along savings to the customer. Mercury FX presents an interesting partnership. Based out of London, the company offers discounts over banks on foreign exchange transactions. We are seeing the effects of an industry interested in the cost-saving measures of XRP but yet to achieve widespread adoption. Expect to continue seeing the accumulation of more partnerships leading to a tipping point. The financial industry–banks, money transfer firms, etc.–hinges upon finding the next great advantage to increase efficiency and cut costs over the competition. If XRP provides that advantage, and at this point it seems almost guaranteed, then expect widespread use to follow in a very short period of time. The last thing any bank wants is to be left behind by its competitors.
SBI Virtual: An XRP only exchange
Taken from yesterday’s announcement by the Ripple Team: “Adding to the momentum behind XRP’s growing global liquidity, SBI Holdings announced that its newly released digital asset exchange — SBI Virtual Currencies — will use XRP as the only digital asset supported at launch.”
The exchange is helmed by SBI Securities, a subsidiary of SBI Holdings notable for being one of the largest online brokerage companies in Japan, with over 4 million accounts (Coinbase, serving a broader U.S./U.K. market has close to 13 million). Not only does the news strike confidence for the growing adoption, usability and excitement for XRP transactions, but it paves the way for possible XRP pairings. Having XRP as the only digital asset supported upon launch gives Japanese customers access to XRP/Fiat pairings as well as XRP/altcoin exchanges–a feature many Ripple holders have been desperate to gain access to. While most cryptocurrency exchanges offer Ethereum pairings for higher volume coins, in addition to the standard BTC/altcoin pairings, SBI Virtual will be the first exchange to offer direct XRP pairings to market coins.
The move by SBI produces a twofold effect for Ripple. The first is greater competition in the crypto-exchange industry, particularly in the form of a professional, vested financial firm that has experience in traditional brokerage accounts. With more customers looking to buy the third largest currency by market cap (and one with a very rosy long-term outlook), lagging exchanges such as Coinbase and Robinhood will feel pressured to include XRP in their offering. It also gives customers direct access to XRP pairings. The availability of XRP/altcoin pairings allows more of the market to shift away from a sole dependence upon Bitcoin for the majority of cryptocurrency pricing and transactions. The market can better place the value of XRP–outside of that solely dictated by BTC price-swings–while also artificially enhancing the demand for XRP for its use in trading. Like the aforementioned competition, if XRP pairings become a popular option we could see more exchanges implement the service for their user base. XRP offers high liquidity (40 billion coins in circulation), and has a market cap almost double that of the next closest competitor (50 billion USD vs. Bcash’s 25 billion). Both are necessary to create the volume required for seamless pairings on an exchange.
At the very least, the introduction of SBI Virtual puts a spotlight on Ripple for both investors and the general public, and pressures certain XRP-less exchanges (Coinbase and Robinhood) to take a strong consideration at adding the currency. Both moves are great for the long-term pricing of XRP, especially when the current bear market breaks. While it can be frustrating to see a lack of price movement following the release of such exciting news as an XRP-exclusive exchange, the entire market is in a slump. Expect the cumulative effect of Ripple’s announcements and partnerships to strengthen the price over the course of the coming year.