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Ripple’s XRP is up a mind-boggling 20,000% this year, putting it on track to end 2017 as the number one performing digital asset.

And the tech startup could have even more room to run. Breaking Wednesday was news of the establishment of a consortium of Japanese credit card companies that will be the focus of studies on how Ripple’s Blockchain technology can aid them.

Let’s discuss.

Banking consortium 

Ripple’s CEO Brad Garlinghouse on CNBC Wednesday boasted about the impressive gains his company has made. He also spoke about how his company is poised to make even more gains in the crypto space, as well as the run up Bitcoin has enjoyed.

Garlinghouse didn’t speak, however, on the breaking news that could directly affect Ripple. That news broke Wednesday afternoon after Garlinghouse’s CNBC appearance.

At the time of writing, the breaking news was pushing Ripple’s XRP price to within pennies of its all-time high.

The news relates to SBI Holdings and its subsidiary SBI Ripple Asia announcing the formation of a consortium of payment card institutions. Ripple and SBI Holdings came together in 2016 to form SBI Ripple Asia.

In the statement released about the consortium, SBI Ripple Asia said:

Distributed ledger technology (DLT) has the potential to enhance the stability, flexibility and efficiency of financial institution systems not only for virtual currency use, but also for a wide range of applications, starting from the fundamental technology of virtual currency. In the card industry, in addition to virtual currency issue and point management, [distributed ledgers are] expected to be utilized in various applications such as identity verification, sharing / fraud prevention of illegal transactions and single sign-on.”

Ripple’s niche

The goals of forming the consortium include reducing costs and improving productivity, which are among the exact things Ripple does. It has built a platform for financial institutions to process their customers’ payments globally. Banks and payment providers are able to use its XRP digital asset part of their processes.

“There is $27 trillion parked at different banks around the world so they can make payments between each other. They can use XRP to do that in real time.”

Garlinghouse also noted the lightning speed in which Ripple’s payment platform allows transactions to be settled. It’s as quick as three seconds. 

Competing with Bitcoin 

All eyes have been on Bitcoin and its gains so far this year. While the crypto has been the darling of the crypto space, Garlinghouse pointed out some notable differences between BTC and XRP. He said Bitcoin was up 15x to 20x this year, but XRP had “dramatically outperformed” those multiples in comparison.

As noted above, he said that XRP has been the number one performing digital asset so far this year. That’s largely due to Ripple actually having real customers, Garlinghouse said. 

“We have an asset that works very efficiently at scale where you can do a massive number of transactions per second very quickly compared to Bitcoin, which is slower. XRP transactions cost a fraction of penny. Bitcoin is $40 per transaction.”

Clearly, Garlinghouse is not a fan of a centralization, and it seems nor are many banks. Ripple touts working with more than 100 banks.

“Banks are excited about democratizing how these global payments flow. We want to transform the global payment system over time.” Garlinghouse said.

Future of cryptos

Garlinghouse called 2017 the year of the cryptocurrency, and few would disagree with that. With all the hype surrounding the space, many are embracing cryptos, and it’s not just Bitcoin. For Garlinghouse, and many others, that’s not necessarily a good thing, so caution is warranted.

A rule of thumb is to look at the token’s utility, Garlinghouse suggested.

“The value of tokens over the long term is driven by utility; what problem is it solving; how big is that problem, how many customers are there?”