xRapid Goes Live But What Is It, And What Can It Offer?

  • Darryn Pollock
    ⭐ Features

    xRapid is now commercially available from Ripple Labs, and the expectation is it could send XRP token price skyrocketing, but what is rapid offering?

xRapid Goes Live But What Is It, And What Can It Offer?
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Ironically enough, as Ripple Labs announced that its much-anticipated product, xRapid had become commercially available and has picked up a few clients, XRP price dropped a few percent. Nevertheless, the third-biggest cryptocurrency by market cap, which snuck into second spot once or twice in the run-up to this announcement, has been surging on the news of xRapid.

But, is the hype surrounding xRapid warranted? While the XRP token suffers from polarizing views in the cryptocurrency space, it is important to view the new move free of prejudice and determine what it is, and what it can offer this nascent space.

What is xRapid?

The main idea behind xRapid is that it is supposed to make cross-border payments far easier, cheaper and quicker. This is an area of banking that is ripe for disruption via the Blockchain, and it is well within Ripple’s wheelhouse.

Ripple and XRP have always been bank facing, and as such, their biggest challenge is to try and get banks on board. With their previous product, xCurrent, they managed to build about 120 partnerships with banks, and now under xRapid, they have recently announced some more partnerships.

Signing up payment firms

xRapid was announced as live on Monday, and with that announcement came three payment firms who had bought into the new Blockchain product. Cuallix and Mercury FX, are the payment service providers and Catalyst Corporate Federal is a credit union. These financial institutions seem to be the foundation for the pilot phase of xRapid.

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

Still, a long way to go

While xRapid can boast about three relatively obscure payment firms jumping on board with their new product, it must be understood that the use of xRapid will still very much be in a testing phase at the highest level.

Still, it is an important gap in the market which cryptocurrencies can fill, and with XRP and Ripple targeting banking and their need for better global inter-bank transfers, the starting point is becoming more established.

Its application is being taken up with some interest as even the Kuwait Finance House (KFH) was reportedly eyeing out joining xRapid. KFH is the first country’s institution to test Ripple-based DLT transaction, so with its plans to integrate the xRapid system for fast and secure transnational payments in the future, it is clearly trying to open some new and exciting doors.

This is the first time that 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.

Is Ripple the right one?

Ripple has gained a poor reputation from the cryptocurrency purists who believe that the token, which is owned by Ripple Labs, is not a true decentralized currency but rather a controlled asset. However, despite this viewpoint, it is also part of the reason why it is well regarded by regulators.

Of the 100 bln XRP tokens in existence, Ripple owns 60 percent. But the company has kept 55 bln 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.

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Question of the Day: Can Stablecoins Accelerate Cryptocurrency Adoption?

  • Yuri Molchan
    ⭐ Features

    Stablecoins show hardly any volatility compared to Bitcoin and altcoins, many are hoping that they will be able to bridge new crypto economy and regular fiat money

Question of the Day: Can Stablecoins Accelerate Cryptocurrency Adoption?
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Bitcoin, the father cryptocurrency, emerged in hope that it will remove all intermediaries in electronic commerce that cut off their share of payments. BTC was perceived as a P2P way to replace fiat cash in an electronic format, which would enable one party to pay another without any financial institution or payment platform which would demand its share of a transaction as a reward for its services.

What is wrong with Bitcoin

For quite a while Bitcoin was performing the way the crypto community expected. But the situation changed later – BTC rate became weaker, thus bringing down its financial and economic reliability, when it gets to be used as a regular means of payment.

You cannot have a currency that would cost like a British castle today, a gram of gold – tomorrow and a pack of French fries the day after.

At that point practical fintech minds came up with an idea of creating something which would become a breakthrough in the universe of crypto – a so-called stablecoin.

Will stablecoins solve the volatility problem?

Technically, stablecoins are protected from the volatility roller-coaster that Bitcoin and other cryptos love to ride. They are programmed to keep their prices stable and investors now are largely attracted to this new type of digital assets.

Stablecoin does not show any volatility in its monetary value, since it has a fixed connection to an asset it is pegged to. The major goal of using stablecoins is taking the best from decentralized crypto coins and combining it with a constant value. Thanks to it, stablecoins can be used as a reliable means of trade.

Asset-pegged stablecoins

Asset-backed ones get their value from an asset as can be understood from the name. An asset provides the necessary value to a coin, as well as the necessary legitimacy.

A great example of an asset-pegged stablecoin is Tether (USDT). In spite of a series of scandals at the end of last year, it remains the most popular stablecoin in the crypto market.

Recently, it has partnered with the Tron Foundation to launch a Tron-based stablecoin.

Other examples are TrueUSD (TUSD), USD Coin (USDC), the Gemini Dollar (GUSD), and the Paxos Standard (PAX). They are all pegged to the USD.

Crypto-backed stablecoins

Some digital coins work in a similar way to fiat-backed ones, however, they are pegged to collateral crypto. That means that crypto assets that ensure the value of such stablecoins are stored in a wallet similar to escrow.

A good example of a crypto-pegged token is Maker, which is ranked 16 on CMC.

Algorithmic stablecoins

Even though, stablecoin can be interesting at first thought but the way they are built goes against the principle of decentralization that crypto coins have as a foundation. Thus, many crypto fans and evangelists are positive that stablecoins must be linked towards not a centralized asset but a computer algorithm which takes value from a balance between supply and demand.

Basis is now considered the most promising algorithmic stablecoin of all.

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Can stablecoin ensure smooth future for the crypto industry?

The primary goal of all crypto assets was and remains to come up with virtual asset that would be liquid enough and not vulnerable to market volatility. From this point of view, stablecoins are a dream of all crypto fans and evangelists of a decentralized economy.

Apart from the potential to conduct crypto transactions smoothly, experts believe it can bridge the two worlds – fiat and crypto, bringing them a mutually beneficial coexistence. However, that may take time.

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