Ripple CEO addressed the criticism surrounding XRP and confirms has no plans to change its strategy
Eight years after its launch, Ripple is still trying to find compelling uses for its Blockchain and new utilities for XRP. Now, to attract more users, Ripple has expressed a new ambition: to try to be the Amazon of the crypto market. They hope to be able to use their platform to support operations far beyond the original cross-border payment system it hopes to build. And up until this point, the company’s CEO, Brad Garlinghouse, said the fact that Ripple is using XRP to solve the world’s burning problem – $ 10 trillion of cross-border payments left.
1/ My fav skeptics are active today! (@FT @nathanielpopper) Ripple has absolutely no plans to ‘reset’ our strategy. Using XRP to solve a real-world, $10T problem, like cross-border payments, is working (1/4) https://t.co/Gkf70dq7G6
— Brad Garlinghouse (@bgarlinghouse) August 13, 2020
Ripple is diversifying its products, building a cross-border payment system
The popularity of XRP has made Ripple – and its leaders – much more productive than most start-up software companies. The company has earned over $ 1.2 billion since the start of 2017.
Garlinghouse admits the value of its crypto hoarding is beautiful ripple:
“We are a capitalist, and we own a lot of XRP. So am I interested in the overall XRP market? 100% yes! But, the company’s aim is to provide more utility through XRP.”
“Ripple has no plans to ‘reset’ our strategy. Using XRP to solve a real-world, $10T problem, like cross-border payments, is working.”
Ripple’s original goal was to build a cross-border payment system that would be more efficient than the technology that’s slowly evolving with banks. Even so, Ripple faces an uphill battle trying to take positions with banks, who have invested heavily in current technology and benefited from the current system.
Ripple is working hard to use XRP to try to attract more users to its technology as it goes beyond banks. In cross-border payments, the company’s focus has been on remittances, where customers pay high fees to send relatively small amounts through money transfer companies. Last year, Ripple bought a stake in MoneyGram, as did Bitso, a Latin American cryptocurrency exchange. Investments have helped put their technology at the heart of about 7% of all money transfers from the US to Mexico in June 2020.
But success represents only one market, and it all comes at a cost. According to the Moneygram report, Ripple invested $ 31 million as a market development fee, encouraging the use of XRP in the first half of this year – payments make up 60 percent of Moneygram’s operating profits.
“It was common practice for payment companies to use financial incentives to generate activity on their networks. The need for payments such as this had fallen as activity had picked up: If you look at more recent customers, it’s a different dynamic now than when we first got started.”
“Amazon of the crypto market” sounds a bit fanciful
According to the Financial Times, the Ripple units trying to re-establish their business and become the “Amazon of the crypto market” sounds a bit fanciful because it doesn’t have a single hit product today. Furthermore, XRP has also failed to gain traction with banks.
Because, for example, one of the major Spanish banks, Santander does not want to deploy XRP for international payments despite using Ripple’s software. Meanwhile, remittance giant MoneyGram receives millions of dollars from Ripple to use XRP.
This approach by Garlinghouse has attracted a lot of criticism. In it, there are many accusations that the CEO has deceived investors with lavish promises about banks using XRP.
Nathaniel Popper, a technology reporter for The New York Times, said:
“If investors put their money into XRP on the day Brad Garlinghouse talked about the banks planning to use XRP — and held it to today — they would have lost around 90% of their investment.”
In response to his doubts, Garlinghouse shared data about the growth of Ripple’s Liquid-on-Demand (ODL) solution, leveraging XRP as a bridge currency to make cross-border payments gender within seconds.
The product’s transaction volume has now surpassed $ 2 billion since its inception, recording an 11-fold increase over the same period last year.
However, Popper did not appear to be affected by seemingly impressive statistics, pointing to the fact that XRP, the only reason Ripple is still profitable, is down 90%:
“Despite the company’s primary source of the value falling over 90% in the last two or so years, the CEO of Ripple is still a believer.”
Unlike Amazon, however, Ripple has not yet produced a hit with its first application, leaving it without a big base of active users to sell other services to. Also, it has a controversial reputation in many parts of the cryptocurrency world, where its attempts to build bridges with the existing financial system clash with the radically anti-establishment motivations of many developers.
Despite Ripple’s struggles to find more uses for XPR, meanwhile, the speculators who have made it a fixture of the cryptocurrency markets are not giving up. Prices were subdued for much of this year, missing out on the jump for bitcoin and Ether, but then soared almost 50% in the final week of July, putting them at their highest level since the coronavirus crisis hit.
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