XRP (XRP)–As cryptocurrency prices continue to suffer across the board as a result of an ongoing bear cycle, the third largest currency by market capitalization XRP is finding increased competition in the realm of cross-border payments. Stellar, now backed in a partnership with IBM, is increasingly becoming a bigger player in the race to create the most cost-effective, widely adopted cryptocurrency for global money transfer.
While SWIFT is still the dominant player in the space of cross-border transactions, Ripple and by extension the currency XRP have come on strong in the last year, with the former estimating a near-50 percent market share in India. As a core component of cryptocurrency, XRP provides developing, unbanked populations access to a safe, secure and fast means for transfer–a feature that is becoming more available in the growing digital landscape. However, while XRP has been a mainstay in the cryptocurrency industry and the reigning contender for global transfer, Stellar and the Stellar-backed venture by IBM appear to be providing stiff competition.
In particular the announcement by IBM at the beginning of the month of Blockchain World Wire (BWW), a DLT-powered payment system, is putting pressure on XRP and Ripple to not only put a tighter grip on global payments, but to expedite adoption in order to avoid becoming irrelevant in the face of a global power like IBM. A line from the official press release of BWW puts the growing landscape of digital and crypto payments in perspective, and the implications it holds for the landscape of fintech,
“It all means funds can now be transferred at a fraction of the cost and time of traditional correspondent banking.”
It is impossible to deny the value that systems like XRP and Stellar provide the world, even if adoption continues to lag behind the technology. As evidenced by the ongoing crisis in Venezuela over the hyper-inflated government-backed Bolivar, and the subsequent utilization of Bitcoin and DASH by normal citizens looking for a more consistent means of exchange, the comfort of Westernized payment platforms is not extended globally. For much of the world, access to a near-instant, cheap and secure form of digital money transfer is a novelty–and one that could be capitalized on by XRP, Stellar and now IBM.
In addition to the strong price stability XLM has exhibited over the summer, following the announcement of a potential listing on U.S.-based exchange Coinbase, the currency offers nearly identical utility to that of XRP. Both coins post under ten second transactions times, with fees being so small as to be negligible. Without the express and driving support of parent company Ripple, XRP looks to lose some if its edge on the market, in particular with the association of Stellar and the powerhouse IBM. Ripple’s efforts to distance itself from the XRP coin come at the behest of both the investment base and greater cryptocurrency community, as questions remain over the level of centralization for the third largest crypto by market capitalization. However, what XRP gains in decentralization and independence as a technology, it also loses in the guiding hand of a company that has brokered partnerships with Moneygram and Western Union, to name just a few.
Most of the negative press and sentiment surrounding XRP is likely a result of the ongoing price depression and fall off from the previous all time high. While XRP was trading at $3.80 to begin the year, it has retracted its bullish run to below $0.30, constituting a sticker shock for most investors over the health of the coin. However, it still has the current market recognition and functionality to continue being a major player in the global money transfer space–it will just require more creative and extensive adoption on behalf of both the developers and user base.