What is Ripple and XRP?
As the incredibly fast evolving technology industry continues to develop ground breaking applications for our financial industries, it is vital for banks to stay ahead of the game by making key decisions on what tech to adopt and what tech to pass on. In the last 5 years, many firms in the banking sector have closed hundreds of branches, cut thousands of jobs and downsized in what many know today as the ‘de-risk’ movement.
Another reason why many banks have downsized is technological advancement and the fact that tech applications are efficiently replacing roles that employees have traditionally been responsible for within banks. It is no longer required to visit your local bank branch on a weekly or monthly basis. Online banking has experienced tremendous progression, capable of replacing most retail processes such as bank transfers, statement and transaction visibility, credit application and KYC verification etc… New technology has allowed banks to reduce overheads, have wider reach and lower costs benefiting not only the firm, but also more importantly, the consumer. The most recent blockchain technology developed for the banking industry is the Ripple Network.
The Ripple Transaction Protocol is an Internet protocol like HTTP that allows a transfer of value across a distributed network. It is built upon a distributed open source Internet protocol, consensus ledger and native currency called XRP (ripples). Released in 2012, Ripple’s purpose is to enable secure, instant and nearly free global financial transactions of any size with no chargebacks. At its core, Ripple is based around a shared, public database or ledger, which uses a consensus process that allows for payments, exchanges and remittance in a distributed process.
Ripple’s solution is built around an open, neutral protocol to power payments across different ledgers and networks globally. It offers a cryptographically secure end-to-end payment flow with transaction immutability and information redundancy. Architected to fit within a bank’s existing infrastructure, Ripple is designed to comply with risk, privacy and compliance requirements. Ripple is a direct competitor of Swift and Sepa.
Some of the major global banks that have already adopted the Ripple Network and are using it on a daily basis include UBS, RBS, Merrill Lynch, Santander, BBVA, UniCredit, Standard Chartered and many more. The list continues to grow, and this is because Ripple is a superior technology. As more banks test and onboard the Ripple Network, the price of Ripple XRP will continue to grow proving to be a great investment for investors willing to buy and hold long term.
In my opinion, banks have 3 to 5 years to become ‘crypto proficient’. If they fail to adopt new tech, they risk entering a landslide of decline similar to laggards in other industries. We have already witnessed revenues migrate to start up programs such as Revolut. Revenues and profits will migrate at scale towards banks and fintechs that successfully use digital technology to automate processes, enhance customer experience and disrupt key components of the value chain.
In the short term, we might not see XRP surpass 0.45 – 0.50 cents. XRP recently became available as a storage coin on the Ledger Nano S. (definitely a positive note for the ripple network).Media
In the future, we will continue to see more banks and banking groups start to adopt and use the Ripple network for cross boarder payments. Every time a payment is sent, a small amount of ripple is lost in the process, reducing the total supply over time. This in affect acts as an inflationary control and will also reduce supply over time.
There are thousands of banks worldwide and trillions of foreign currency exchanged and transferred globally every single day. If the ripple network captures just 1% of the global payments market, we could easily see ripple XRP at 1 USD – 2 USD per coin.
If you’re now ready to buy Ripple XRP here in the UK, as a London based cryptocurrency broker, we are able to supply altcoins including Ripple for competitive prices for GBP bank transfer. To get started, head over to our XRP page and click ‘order now’ – or alternatively, call us directly to speak with a dedicated broker.