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Ripple’s xRapid is now commercially available!
Editorial Team

Ripple’s cryptocurrency product for cross-border payments will actually go live for the first time with three financial institutions, according to CNBC.

On Monday, the San-Francisco-based financial technology firm that uses XRP to execute international transactions in a “matter of minutes” is now commercially available.

It will be used by payment providers Mercury FX and Cuallix, as well as cooperative financial firm Catalyst Corporate Federal Credit Union, Ripple said. Chief Executive Brad Garlinghouse was set to announce the news at the start-up’s annual Swell conference, a two-day event attended by industry representatives, on Monday.

“I’m really excited to bring the product into the market at a time when there is a lot of skepticism about digital assets and their real use case,” Asheesh Birla, Ripple’s senior vice president of product, told CNBC.

“Here’s something where we’re finding a ton of value and providing a ton of value to our customers using digital assets to move money more efficiently.”

According to Ripple, there is a distinction between it, a private company, and XRP that is the native cryptocurrency of an open source network known as the XRP Ledger, even though there is often confusion between them.

Ripple owns 60 percent of the 100 billion XRP tokens in existences. However, they have kept 55 billion of the tokens locked up in an escrow account to “create certainty of XRP supply at any given time.” Therefore, it has only access to 13 percent of the digital currency.

This development means that XRP cryptocurrency will be the first time to be used in a commercial application by financial services firms and doubtlessly is seen as a milestone in Ripple’s and overall crypto’s history to become mainstream.

The company’s business model also relies on deals with financial institutions, providing it with a core source of revenue.

Ripple had been testing the cryptocurrency product with Cuallix, Mercury FX and a number of other payment companies, including money transfer giants Western Union and MoneyGram.

The company has not publicly announced any banks piloting xRapid, and has said that big lenders are unlikely to be first to test or use it.

“Banks worldwide are not first adopters of the xRapid product, but we are seeing a lot of financial institutions in general and payment providers moving forward with that product,” Birla said.

“We have a lot of business with payment providers,” he said, adding that “in certain markets, I think banks will move faster towards leveraging digital assets, and so it really depends on the regulation and the local market.”

According to Ripple’s executive, financial institutions in emerging markets were potential contenders to use the cryptocurrency product in the future.

“Those countries have a lot more forward-looking regulation when it comes to digital assets, so I would envision that those would be the first bank adopters.”

Two weeks ago, Sagar Sarabhai, head of regulatory relations for Asia-Pacific and the Middle East at Ripple, told CNBC he was “confident” that news of xRapid’s commercial application would be announced, “in the next month or so.”

And Ripple’s Garlinghouse has also said he believes “dozens” of banks will use XRP by the end of 2019. The firm’s xRapid product is primarily targeted at banks transferring money into emerging markets.

XRP’s price soared in value in the following days of CNBC’s report about the upcoming rollout of xRapid. It was also announced that the US bank PNC had joined its clientele of banking partners.

Ripple says xRapid uses the digital asset as a kind of “bridge” between currencies, allowing payment providers and banks to process faster cross-border transactions.

For example, a bank might want to process a transaction from U.S. dollars to Mexican pesos. According to Ripple, this process normally requires pre-funded local currency accounts in order to take place. Ripple claims that process can be bypassed by converting the U.S. dollars into XRP tokens through a cryptocurrency exchange, moving the money overseas, and converting it into Mexican pesos via a local digital asset exchange on the other end.

Ripple has previously partnered with many financial institutions focused on the testing and use of its xCurrent product, which is used by banks to track information about a payment in real-time and without a counterparty to speed up the settlement process.

Figures released by Ripple on Monday show the firm doubled the number of customers signed up to its network in the third quarter from the same period in 2017 — it currently has more than 120. Its business partners are located across more than 40 markets.

“I think we’ve had a better year,” Ripple’s senior vice president of product Birla said. “We’ve had a lot of adoption, our sales team is out there now closing over two deals per week over our suite of products and so it’s just been a better and really a momentous year for Ripple.”