Ripple briefly took second position in market cap earlier today before ethereum re-gained it, with just $400 million currently standing between the two.
This unexpected competition for second place comes just a day or so after Bitcoin Cash rose some 30% in expectation of a chain-split hardfork.
Thus no one was paying attention to Ripple, except Japan. An exchange there tops XRP’s trading volumes, with the exchange itself handling far more Ripple volumes than for any other crypto.
We could not find any recent Ripple news from Japan, with the only thing of relevance appearing to be a comment made in September by Yoshitaka Kitao CEO of a financial company with a $5 billion market cap, SBI Group. Kitao said:
“We have already begun discussions to create a project to use XRP for R3. By using R3, XRP is used more extensively.”
What that means exactly is not very clear, but Ripple’s plan is to focus on international remittance. They basically aim to buy XRP on one exchange say in US, send the XRP to an exchange in Japan, and then transfer it from the Japanese exchange into JPY through the local banking system.
Ripple Labs Inc, the company that runs XRP, sold $400 million worth of XRP this year up to October. What they plan to do with all that money is not very clear, nor is it clear whether they can or do buy XRP with it.
Some of it may have gone towards trying to persuade banks to use the above RippleNet network. Unsubstantiated rumors now suggest this might be easier due to a very technical change at SWIFT which says:
“This change will allow members of the SWIFT gpi service to track their payments on the SWIFT network end to end, even if they are being processed by banks that are not part of the SWIFT gpi Closed User Group (CUG).”
The wild speculation is that banks will be able to use Ripple while still connected to SWIFT. A representative from Ripple will further today appear in a panel at a SWIFT conference to “discuss how leveraging new technologies such as SWIFT gpi, DLT and APIs can help improve fluidity in cash management and ultimately enhance the corporate customer experience.”
Why they focusing on corporations, as in banks, is not very clear. One reason may be because individuals can themselves buy XRP, or indeed bitcoin, eth, or any other crypto, from a US exchange and send it to a Japanese exchange.
Likewise banks too can themselves do this buying and selling, with the problem of course being volatility and the many other risks as well as the end to end fees.
Nor is it clear why SWIFT would play any role in all this. SWIFT would be limited to only local bank transfers say within US, while the crypto then handles the international transfer from US to Japan, when we go back to SWIFT for transfers between the bank of the Japanese exchange and the Japanese bank of the end customer.
Here basically you’re replacing correspondent banking, and here it’s where Ripple hits a wall because they are asking banks to move away from their own service, and pay Ripple to use Ripple’s service. Basically, they’re selling to their competitor. It’s like Apple going to Microsoft to tell them buy our laptops rather than bothering to produce your own windows laptops.
While here Ripple is basically telling banks pay us fees, rather than you yourself charging fees for doing what we want to do.
Meaning that the rumors probably have no substance and while banks might test Ripple or any of its products, they’d probably be limited by business considerations when it comes to actual usage.