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Ripple (XRP) has overtaken Ethereum to become the second most valuable cryptocurrency by market capitalisation in the world.
Many see bitcoin as being the grail of cryptocurrency largely due to the fact it has increased dramatically in value, consistently remaining number one and predictably attracting the most media attention, however Ripple’s XRP currency has started to close the gap in the past few weeks after signing up several big financial institutions to use its technology.
Ripple announced last week that three of Japan’s credit card companies have signed up to use it’s technology, this created a large increase in the price of XRP, which is up 6x in the past month and almost 300x in a year.
Its market capitalisation climbed to $83bn this evening (Friday 29th December), overtaking Ethereum’s $71bn market value, but behind bitcoin’s $243bn overall value,
Ripple’s current market cap would put it among the world’s 30 biggest banks, ahead of the banks such as Lloyds Banking Group or Japan’s Mizuho Financial Group.
Ripple’s payments system uses blockchain technology to move money almost instantaneously and at low cost between countries and currencies.
“Ripple has done a good job of convincing big institutions to use their currency,” said Eddy Travia, chief executive of Coinsilium, which advises and invests in companies that use blockchain. “The worry is that when the price goes up so much it moves the focus from the technology to just the speculation.”
Ripple enables cross-border payments to be completed within 10-15 seconds, compared with a snail paced 3 days for interbank transactions using the archaic Swift network, which has been around for 44 years ago when it was created by some of the world’s biggest banks.
The recent increase in the price of XRP really started to get going after a group of Japanese and South Korean banks last week announced the launch of a pilot scheme to use Ripple’s technology for sending money between the two countries.
Ripple has much more XRP in reserve than is publicly traded, giving it a war chest worth about $115bn, which it plans to use to encourage banks and other large financial institutions to adapt its technology.
The US company has signed up more than 100 financial institutions to use its blockchain technology to move large sums of money across borders. These companies have been impressed and attracted to partner with Ripple as they offer various ways of making cross-border payments. One of which allows customers to buy and sell XRP to move money almost instantaneously between countries and currencies. Another uses a blockchain ledger to record and co-ordinate transfers between banks’ own accounts.
“2017 has been the year of the digital asset, and XRP has clearly outperformed every other digital asset,” Brad Garlinghouse, Ripple’s chief executive, told the Financial Times. “The reason for that is that the market has realised that XRP is a highly efficient payments mechanism that is solving real world problems for real world customers with real money.”
He said that “people are increasingly realising that bitcoin is not going to be a panacea for all these payments problems that people imagined it would solve”. He added: “Payments with XRP settle in a few seconds, but if you buy a cup of coffee with bitcoin it will be cold by the time the payment has been settled.”
Ripple XRP isn’t the only fast growing cryptocurrency, as I reported earlier today ZClassic (ZCL) is growing dramatically, you can read more about that here
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in ANY cryptocurrency.
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