According to an interview with Ripple’s Sagar Sarbhai on CNBC, Ripple’s xRapid product launch for bank payment rails will launch for commercial application within the next month.
Building on the news of the launch of Ripple’s cryptocurrency product, PNC Bank — one of the 10 largest banks in the US — announced that it has joined RippleNet to facilitate cross-border payments for its customers using Ripple’s xCurrent product.
Ripple Gaining Traction With Banks
Ripple also recently announced that its RippleNet has reached 40 countries with a focus on expanding the global remittance market and improving SME payments.
To date, RippleNet consists of some high-profile participants including payment processor American Express and banking groups Banco Santander and the SBI Japan Bank Consortium. Ripple’s current product xCurrent is used by participating entities and will be a key stepping stone for current and future participants in the xRapid product.
xRapid is a low-cost liquidity service aimed at payment providers and financial institutions looking for reduced capital requirements for liquidity. Powered by XRP, xRapid is designed to facilitate real-time payments for banking payment rails and on-demand liquidity.
XRP has responded positively in the markets following the news.
Ripple, Regulations, and Banking
Ripple has primarily targeted integration with legacy financial institutions rather than pursuing more decentralized, public blockchain payment networks like Bitcoin. As a result, their products may prove beneficial to increasing efficiencies within traditional payment networks including consortium banking groups and major payment processor networks.
Banks will not be the first to test the xRapid product, as payment processors Western Union and Moneygram trialed the xRapid product earlier. Eventually, the product is expected to enable real-time payments in emerging markets and is touted by Ripple CEO Brad Garlinghouse as being used by “dozens” of banks by the end of 2019.
Despite Ripple’s friendly approach to the financial industry, looming regulations have caused concern for Ripple, who has had to repeatedly refute its XRP token’s existence as a security token, something that would cause the platform serious problems. Ripple went so far as to hire 2 former SEC officials to represent it in a lawsuit claiming the XRP token is a security.
Ripple holds a unique position in cryptocurrencies. It exists as a platform that is out of favor with many proponents of more decentralized and transparent networks like Bitcoin and is gaining traction with traditional financial entities. On top of that, the precarious position of its XRP token, with regards to regulation, offers an interesting metric for broader regulation of the cryptocurrency sector. SEC officials have already made statements saying the Bitcoin and Ether are not securities, but there hasn’t really been any clarity on other tokens.
How regulations will eventually effect XRP and Ripple is unclear. However, Ripple continues to garner adoption among banks and payment processors and their xRapid product should bolster their integration with established financial networks moving forward.