By Breaking News: XRapid to Go Live
On Monday 1 October 2018, at Ripple’s annual two-day Swell conference, Ripple CEO Brad Garlinghouse announced the commercialization of its international payments and transfer technology, XRapid.
The announcement confirmed that three financial institutions are scheduled to begin using Ripple’s XRapid product to handle international transactions. This development is seen as a major breakthrough as XRapid will be deployed by Catalyst Corporate Federal Credit Union, Cuallix, and Mercury FX. The pilot project for the XRapid roll out had participation by both Cuallix and Mercury FX earlier this year, both institutions are payment providers, with the former focusing on remittance payments between the US and Mexico. The financial institution Catalyst Corporate Federal Credit Union is new to the XRapid product and serves cooperative financial institutions across the United States
Ripple claims that the two most significant advantages of their technology XRapid include a reduction in the cost of sending international payments by between 40% and 70%, as well as a significant reduction in the time taken to send such transactions, which has been reduced from several days to only 2 minutes.
Ripple’s XRapid Technology
XRapid uses the cryptocurrency XRP as the medium to facilitate international transfers. Any institution that wishes to make an international payment will first connect to a digital asset exchange in order to exchange the originating transfer currency for the cryptocurrency XRP. The newly exchanged cryptocurrency XRP is then sent to a digital asset exchange in the country where the payment is being received and is converted from XRP to the local fiat of that country. This differs from the normal process for international transfers in that the currency being purchased is bypassed. XRapid, therefore, allows digital assets to be used as an international bridge to facilitate global transfers.
According to Ripple, financial institutions and payment providers will not need to hold XRP directly in order to use the XRapid product. XRP may be purchased by financial institutions from traders on digital asset exchanges in order to complete international transfers. Ripple has, however, indicated that Bittrex would be the preferred exchange for transfers involving US Dollars, Bitso the preferred exchange for Mexican Pesos and Coins.ph the preferred exchange for Philippine Pesos.
While Ripple has not yet formally appointed any banking partners for its XRapid product, banking institutions are experimenting with Ripple’s XCurrent product, which is a product that allows banks and financial institutions to monitor and track payments without the need of a counter-party.
Impact on XRP
XRP has seen extreme price volatility over the past week as a result of rumors that Ripple was on the verge of announcing a major partnership for XRapid. The price volatility of XRP resulted in XRP momentarily displacing Ethereum as the second largest cryptocurrency by market capitalization. Ethereum has, however, maintained its position due to a decrease in XRP’s price since then.
XRapid is a crucial milestone in the development of cryptocurrencies and blockchain technology as part of the financial mainstream. It is the first time that XRP will be used by financial services firms for commercial applications. Many have long held that blockchain technology will revolutionize traditional financial services sectors, and this announcement is seen to be the first step in that process. Ripple’s momentum, and indeed the momentum of the whole crypto industry, will be tested as the market follows this landmark development.
Do you believe XRapid will revolutionize the commercial application of cryptocurrencies in international transfers? Let us know your thoughts in the comments below.
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