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Ripple is the first cryptocurrency with a concrete purpose of its existence. They are designed for the banks and other financial institutions to help them lower transaction fees for fiat currencies. Ripple aims to achieve this with the (XRP) token and Ripple’s network. During the last few months Ripple is actively achieving its purpose. Over 100 big payment providers have signed and are continuing to join Ripple’s mission, benefits and features.


What is Ripple?

Ripple is the third cryptocurrency by market capitalization and is pretty different than the leaders – Ethereum and Bitcoin. It is considered the banks favorite and with reasons. It is a digital currency and an open payment network. The cryptocurrency (XRP) is specifically designed for financial institutions and payment providers. Ripple’s network connects banks and other institutions through “gateways” allowing them to transfer money and assets through the network.

What they offer the banks is a reliable and on demand source of liquidity. This will allow payment providers to send cross-border payments, without having to go through foreign transactions and exchange rates for foreign currencies. Ripple’s goal is to enable banks and financial institutions to transact directly, without correspondent third parties. If you want to learn more about Ripple’s ambitious project and mission you can read our Ripple guide.


Who are the new additions?

There were news that Ripple signed with the biggest cryptocurrency exchange in Dubai – BitOasis. This is great news for XRP and will bring more trading volume. The currency will be open for purchase in the exchange from 30 January.

Ripple have also added two new valuable additions to its network. The company has signed deals with MercuryFX and IDT Corporation. These two payment providers handle millions of international transactions every year. Both companies have signed so they can use Ripple’s xRapid platform.

This platform allows institutions and banks to save money on cross-border payments and liquidity transfers for their customers by having an easy and quick access to liquidity. The way the platform is designed is to allow quick and cheap global transfer services.

A big plus for the banks is that they can free up capital that is normally tied to nostro and vostro accounts. They are accounts in foreign banks which hold foreign currencies. The purpose of these accounts for the banks is to simplify cross-border payments and exchange rates. Usually these accounts have millions in liquid assets that are held between the two banks. Ripple will allow for these assets to be locked down by blockchain technology, thus freeing up capital so it can flow more freely and leaving more options for these financial institutions.

Earlier this month, Ripple signed with the second largest international payment provider – Moneygram. They announced this partnership and that they will use the xRapid network. Another institution that signed with Ripple is the Mexican bank Cuallix. At the end of last year, Ripple announced a partnership with the credit card provider American Express.


What does this mean for the XRP token?

It is safe to say that Ripple’s token is getting more valuable with every new payment provider they sign. Ripple wants to prove that xRapid is cheaper and faster than other payment options and it maybe is. This platform could play a transformational role for the traditional banking services and customer service. The best thing for the banks and institutions is that they only need enough XRP on hand at any given time to cover their largest payment obligation, not every transaction in a given month.

The full list of Ripple’s partners is long with over 100 central banks and many more payment providers. The list is only going to increase with the development of the project. More and more payment providers look up to Ripple and the benefits that bring. In time the banks that don’t use Ripple will only be forcing customers to pay larger fees and slowing their transactions down. Also freeing up liquidity is something that they could not do before and opens a lot of doors for the banks.

Currently the XRP token is still suffering from the corrections that took place. Ripple’s price is still hesitating, going up and down, but the good news for the company are flowing. The CEO of Ripple Brad Carlinghouse said recently that there are a lot of major announcements about big partnerships with major companies that are coming. For now however this confidential information will not be revealed until the banks and financial institutions are ready to reveal themselves.



Is Ripple’s price going to rally up again?

The XRP token made incredible gains throughout the whole 2017. It is the first coin with a purpose and the company is following its mission. If more and more financial institutions are signing with Ripple, does this mean we should expect large volumes of money entering Ripple’s market cap? There is conflicting information about the XRP token being used in the Ripple network. The xRapid network uses XRP and the xCurrent does not.

I do not think that you can have a Ripple payment network without the actual coin itself. XRP represents a source for liquidity, but also a hash. Each time you send XRP over the payment network, there is a digital receipt that goes with it, which is a transaction number. You can have the receipt without the coin, but then you wouldn’t have a ledger with the balance. XRP represents the money balance that is transferred and creates the credit.

If banks use these tokens in the xRapid network it would mean that large investments are coming to Ripple’s market cap. If this happens we should expect large growths for the XRP token.


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