Ripple, a blockchain company, has been advocating the use of cryptocurrency for cross border payments. Specifically, its native cryptocurrency – the XRP and its xRapid technology have been adopted by banks, governments, institutions, among others globally. As a result, it leaves room to wonder if XRP can overtake Bitcoin to become the major “global currency”.
The Disparity in BTC and XRP Use Cases
Bitcoin and XRP are significantly different in terms of price, speed of transaction, use cases among several other options. While Bitcoin was initially designed to be a global currency for facilitating payments efficiently, the market today is less willing to spend Bitcoin for goods and services. Instead, the cryptocurrency serves as a store of value and a speculating tool.
On the contrary, Ripple has partnered with over 200 banks across the world such as Euro Exim Bank, UK’s Santander, and Canada’s ATB Financial who are using XRP technology as a settlement tool.
Rumors of Bank of America Using XRP Ledger for Transactions
In the same vein, news began to emerge that the Bank of America is looking to use the XRP ledger for its transactions. Ripple’s CEO, Brad Garlinghouse, while making comments said on July 22, 2019, that Ripple is yet to make an announcement about the speculation. However, he cannot confirm or dispute the news, which still leaves a lot of uncertainty.
There’s also Ripple’s Q2 2019 report released on July 24, 2019, which shows that the firm made almost 48 percent increment in XRP sales in the quarter alone. These sales amounted to $251 million, which differs from the first-quarter sales of $169 million.
Similarly, the blockchain company is not only promoting XRP to banks but actively grappling with SWIFT, a platform for facilitating cross border payments, which has been active since 1973. Ripple’s CEO, Brad Garlinghouse once said: “what we’re doing and executing on a day-by-day basis is, in fact, taking over Swift.”
Cross Border Payments
It is worthy to note that if Bitcoin is used to facilitate international transactions, these payments would be faster and their transaction fees reduced.
Nonetheless, a large number of transactions could pose more load on Bitcoin’s network since too much emphasis wasn’t placed on the high transaction of the network. XRP, on the other hand, has proven to handle large transfers within seconds at no cost for international transfers.
As a result, the level of adoption for XRP as a payment tool by banks and major institutions could potentially make it a global currency. Someday, it could also be used to carry out daily transactions since people may be more willing to spend XRP than hoard it as in the case of Bitcoin. It is, however, worthy to point out that, this does not translate into XRP replacing Bitcoin as digital gold.