Ripple, the blockchain remittance company has made a name in the cross-border payments industry. The firm boasts of several institutional clients who utilize its service for money transfer globally. In the center of all this is XRP, the native token that is used as a source of liquidity for these payments.
XRP’s utility for liquidity is constantly on the rise in the payments industry as Ripple’s service gains more acceptance. For instance, in 2019, there was a significant increase in the adoption of the cryptocurrency and the underlying blockchain technology. One of the areas where this technology is most widely adopted is in cross-border payments where XRP plays a key role.
Although governments, particularly the United States of America have not been in full support of digital currencies, this one use case of blockchain technology has gotten their attention and they have declared support for it. Treasury secretary, Steven Mnuchin has this to say about it:
“There are benefits to cross-border payment systems in lowering costs for consumers and businesses. We absolutely support companies working on this.”
Even companies that have adopted Ripple’s payment service are scaling up their use of the company’s On-Demand Liquidity (ODL) service which uses XRP to cut the cost of money transfer as well as make it lightning fast.
MoneyGram, one of the top clients in which Ripple has a 10% share, announced last year that it will be increasing its use of ODL for cross-border payments between the U.S and Mexico in 4 more corridors. This will increase XRP’s utility as more financial institutions get connected on Ripple’s payment network, RippleNet.
Major institutional investors also entered the cryptocurrency market significantly last year with major names such as Fidelity coming into the crypto space. Also, the introduction of institution friendly trading platforms such as Bakkt has helped to encourage this influx of major institutions. It means the year 2020 may promise to be a better year for digital assets than 2019 ever was.
Ripple CEO Brad Garlinghouse in December last year said Ripple will focus on utility in 2020 as real-life use cases will be the determining factor in crypto adoption. With the growing adoption and the maturing market with institutional clients, 2020 could turn out to be the best year yet for XRP and the cryptocurrency industry as a whole.