In recent years, cryptocurrencies have gained immense popularity. They give people ways to make completely anonymous and secure transactions for virtual services or products. For example, many online casinos and paid game platforms accept cryptocurrency payments or deposits. In the future, they may also become more popular in banking.
Why Banks Benefit From Cryptocurrency Payments
What makes cryptocurrencies so popular for payments is their blockchain-backed security. The way that blockchain is structured is like a series of blocks that are linked together. By design, the blocks cannot be modified. Each block or transaction creates a timestamp. The ledger of the chain of virtual blocks is copied in many places, which means that tampering with it is nearly impossible. Today, crypto enthusiasts are exploring more ways for banks and financial institutions to use cryptocurrencies. Many banks already use security features that are backed by blockchain security, and some use cryptocurrency payments for certain types of transactions. While uniform use of a cryptocurrency in the United States may still be in the distant future, there are plenty of potential benefits for financial institutions to use cryptocurrencies for foreign payments. One company that is working toward standardizing cryptocurrency international payments among banks is Ripple.
Ripple‘s Recent Growth
Recently, Ripple demonstrated that it was serious about moving forward with international cryptocurrency payments with a Series C round of funding. It raised $200 million with help from Tetragon, Route 66 Ventures and SBI Holdings. Fortune reported that Ripple was worth $10 billion after the funding round. Ripple’s CEO said that the company was in a strong financial position to work toward its goals. He also said that other participants in the blockchain world have slowed down, shut down or stood still in recent months. As he pointed out, Ripple has been moving forward in great strides. He indicated that he was pleased with the company’s growth and its hard work toward its goal of being a leader in the industry in 2019. After the funding round, it appears that Ripple will continue to work toward its leadership goals in 2020. Contrary to popular belief, Ripple is not a new company. While its prototype was developed in 2004, it did not take off until 2013. At that time, one of the founders was successful in finding investors from around the world to help fund Ripple.
Ripple’s Goals For 2020 And Onward
Since it started, Ripple has been focusing mostly on cross-border payments. However, it has also been working on improving other services for transmitting money with XRP, which is a cryptocurrency with its own special blockchain. The special chain is called the XRP Ledger, and XRP’s total market cap is so significant that the currency ranks No. 3 on the list of the largest cryptocurrencies. Bitcoin and Ethereum hold the top two spots. The last report on XRP showed that it was worth $8.4 billion. Although it is a decentralized currency, Ripple holds an interest in a significant share of XRP. Ripple sold more than $66 million in XRP tokens during the last quarter of 2019. According to Ripple, XRP especially has the ability to facilitate easier and more secure cross-border transactions. As an easier and cheaper solution, it would help banks and major financial institutions save both time and money. One of the ways that Ripple hopes to move forward in 2020 and beyond is by convincing and helping financial institutions to switch to RippleNet for back-end payments across international borders.
What Is RippleNet?
RippleNet is a network of participating banks and money service companies. With its global ledger of privatized blockchain, it gives participants the ability to send or accept payments in the form of XRP tokens. This helps it maintain liquidity across borders. To boost efficiency, the system is designed to store information and use that data to find the cheapest and quickest ways to make transactions happen. The last report of RippleNet showed that it had about 300 customers. Ripple took a 10% stake in MoneyGram to facilitate a partial switch to RippleNet’s services. As 2020 arrives, Ripple plans to move forward in encouraging more banks and money service companies to participate.