The use of the term ‘tipping point’ is used to designate when momentum behind a new idea’s adoption becomes unstoppable.
Has xRapid, Ripple’s solution for sourcing liquidity with the cryptocurrency XRP, reached that point? Brad Garlinghouse doesn’t pull any punches when he points out the differences between the industry’s first mover – Bitcoin – and the newer network that doesn’t depend on mining to secure its transactions – XRP. But he is also realistic about what it will take to get banks, one of the most conservative customers, to use digital assets: 1
“I think the same thing will happen in banking. People who are invested in us love xCurrent but they’re not sure about xRapid… I think it’s just the beginning.”
He compared xRapid adoption to a ‘crawl-walk-run’ situation, highlighting how remittance processors will be the first ones to verify and document XRP’s cost savings.
And he’s right. Thus far, four of the confirmed eight (yes, eight) remittance processors have verified and published their positive verification of xRapid’s cost savings:
For clarity, understand that hundreds of banks are signing up to use Ripple technology. So many that Ripple discloses new xCurrent customers in batches; xCurrent is Ripple’s replacement for most of the functionality behind SWIFT’s messaging system. I like Ripple’s quiet confidence regarding xCurrent and xRapid. If even XRP fans are left guessing which banks will be the first ones to flip the switch on using XRP as a bridge asset, you can rest assured that analysts from SWIFT are wondering the same exact thing.
When correspondence banking starts to utilize xRapid for sourcing liquidity, and a who’s who of the world’s largest banks are using ILP for messaging, it’s a sign that SWIFT’s glory days are now in the rear-view mirror along with the status quo. Changing an industry is never an easy task, and it’s taken Ripple more than five years to finally convince conservative financial institutions that using a digital asset can result in real-time payments that settle in less than four seconds.
General Crypto News & Impacts on XRP
On May 21st, several news outlets covered a statement made by Bruno Le Maire, France’s Finance Minister. In an interview with Alex Stachtchenko, He stated: 12
“I was a rookie a year ago, but now, I’ve been seized by a sudden passion. It took me a year. Let’s teach this knowledge to our fellow citizen to make France the first place for blockchain & cryptocurrency innovation in Europe.”
This statement arrives on the heels of France’s decision to decrease the tax rate on cryptocurrency sales from 45 percent to 19 percent. The French government also has announced that it will look at creating a special regulatory framework to assist entrepreneurs with overcoming obstacles to starting new blockchain businesses.
Coincheck suffered a black eye from the adverse publicity arising from the NEM hack in January of this year. 13 As a result of the hack, Coincheck received a business improvement order from the Japanese Financial Services Agency (FSA) on March 8th. 14 The exchange was allowed to continue operations as they made improvements, including implementing stringent KYC and AML requirements.
To comply with KYC and AML, the exchange made the decision to de-list all trading of privacy tokens, due to the fact that the technology allows ease-of-use for those attempting to launder money or otherwise avoid detection. In fact, no exchanges that have applied to the FSA have listed any privacy coins.
If you want to own and trade in XMR, ZEC, DASH, or REP, you’ll need to work with an exchange outside of Japan. How does this affect XRP? It shouldn’t impact XRP, other than the general benefit of a narrowing of choices on the exchange.
While XRP can be anonymized by usage of a technique called “Pathshuffle,” it does not contain any native code for the purpose of anonymity. In other words, to anonymize an XRP payment, the technique would involve obfuscation of sender and/or receiver through a method of using the network. It’s not an inherent capability, and this puts it in the same category as Bitcoin, Ethereum, and other cryptocurrencies that Coincheck will continue to support. 15
Block Show is a series of events and conferences sponsored by Cointelegraph. The latest one occurred in Berlin, Germany, from May 28th through the 29th. Among the attendees and participants were David Schwartz (@joelkatz on Twitter and other social media) and Tiffany Hayden (@haydentiff on Twitter).
The conference organizers live-streamed a presentation by a number of panelists including David Schwartz, on May 29th:
When the panel discussion started, the facilitator asked David Schwartz immediately about the level of decentralization of the XRP Ledger, along with the utility of XRP. David Schwartz provided his perspective on those topics in a very intuitive manner.
Here’s a portion of that introduction:
Question: “Is it (the XRP Ledger) centralized?”
Answer (David Schwartz): “I don’t think so. I think that’s a buzzword that people define to create a criterion that their favorite project sort of “passes,” and the projects that they like less, fail.
I think that when people want a system that is decentralized, what they want is a guarantee that the system will treat everybody fairly; that there isn’t someone who can arbitrarily change the rules; that the system will behave the same way next year as it does today.”
As always, David Schwartz provided his intuitive perspective on complex topics in a way that nicely summarized the logic – or lack thereof – of some of the points. Not every venue captures the genius behind his problem-solving skills, but this panel seemed to be a great example of his ability to quickly frame up complicated issues.
xRapid Pilot Results for Currencies Direct
You may not have known about this xRapid customer – I know it was a surprise to me when I saw the announcement; Currencies Direct has been a part of a pilot using xRapid for sourcing liquidity while making cross-border payments. In addition to being an unannounced xRapid customer, Currencies Direct issued a statement about their initial trial, saying: 16
“Our goal is to offer the best possible service. We believe that utilising cryptocurrencies in this way – as a transfer of value, rather than as a store of value – is the next logical step for our industry. It is, after all, the intended purpose of cryptocurrencies and we’re proud to be leveraging new technology to deliver the most convenient and seamless experience for our customers.”
The announcement then went on to explain the mechanics behind XRP’s use in xRapid, which was a refreshing primer for any readers that didn’t already understand the basics.
How big is Currencies Direct? Its reach extends to eight countries and they handled $4.5 billion in currency swaps last year. They pride themselves on providing better rates on currency swaps than traditional banks. 17
With all of the remittance processors using xRapid and unanimously validating the cost savings associated with XRP’s use, I predict that XRP owners won’t have long to wait before utility-driven demand makes itself known.
Japan Society of Monetary Economics
XRPWorld recently discovered that SBI Ripple Asia was due to speak at the Japan Society of Monetary Economics.
“Interestingly, SWIFT will speak right before Mr. Okita on the subject of ‘Global Payments Innovation’ presented by Hiroshi Nakatake representing MUFG Bank”
I agree that it would have been quite interesting to see the SWIFT presentation and then Mr. Okita back-to-back. 19 Perhaps it was an intentional ordering of the presentations, so that listeners could be apprised about facts regarding the status quo vs. the new technology that is now being adopted en masse by global banks.
The meeting was scheduled to take place on Sunday, May 27th at the University of Senshu in Tokyo, Japan. 20 From a few quick searches, it doesn’t look like the Japan Society of Monetary Economics posts videos of their conferences, but perhaps eventually an audience member may upload a video of the conference.
Bank of America?
An XRP fan noted on Reddit that he’d come across a reference to Ripple technology in recent Bank of America collateral. On May 17th, Bank of America held its “Development Day;” this included a presentation on the topic of Blockchain technology and its use in trade finance. The author of the Reddit post provided two direct quotes contained in the presentation: 21
“Ripple provides an opportunity to reduce complexity of integration to enabled partners, standardise data protocols and formats and eliminate errors and reconciliation through use of blockchain distributed ledger technology”
“Pilot to enable more efficient cross-currency payments by reducing lengthy/unknown settlement times, eliminating multiple layers of cost and providing greater transparency over FX, fees and data shared between originator and recipient.”
While there is no specific mention of xRapid, I would assume that BOA is piloting xCurrent for usage as a replacement for SWIFT messaging. I also placed a question mark at the beginning of this section, because even though this second-hand account of the presentation is encouraging, there has been no formal confirmation or announcement of BOA as a Ripple client.
Hopefully we’ll see BOA or Ripple make a formal announcement in the near future.
Kuwait Finance House (KFH) Joins RippleNet
Banks worldwide are joining RippleNet in greater numbers; among this list are many banks based in the middle East, and that list includes at least one central bank as well. The latest bank to join the network is the Kuwait Finance House, or KFH for short. 22
KFH was established in 1977 as the first “Islamic Bank” in Kuwait. 23
What is an “Islamic bank?” An Islamic bank is a bank that handles its affairs and its investments in compliance with Sharia, or Islamic law. This gives it some unique characteristics, such as following the Muslim restrictions on “riba” or “usury” which essentially prohibits interest on loans. That’s just one example of what sets apart an “Islamic” bank from an ordinary bank. 24
KFH is heavily owned by the Kuwaiti Investment Authority, which essentially handles investments for the Kuwaiti Sovereign Fund. KFH’s reach extends internationally to several other countries, such as Bahrain, Saudi Arabia, Turkey, and Malaysia. The addition of KFH exemplifies that RippleNet is connecting all parts of the global banking system, including those economic powerhouses that exist in the Middle East.
National Bank of Kuwait
The National Bank of Kuwait was established in 1952, and has grown into one of the largest regional banks. It manages total assets of roughly $79 billion, and posted revenue of $3.2 billion in 2016. 25 On Tuesday, May 29th, the National Bank of Kuwait’s Twitter account formally announced their membership in RippleNet:
The Kuwait Finance House (KFH) and the National Bank of Kuwait both announced their RippleNet membership within three days of each other.
Coinome is an Indian-based exchange owned and operated by IndiaIdeas.com Ltd (BillDesk). 26 Because their volumes are not included in coinmarketcap.com, I don’t know how large they are, or what impact they will have on overall XRP liquidity. It’s nice to see their enthusiasm on display in their Twitter announcement:
It appears from its currency pairings that Coinome offers fiat support for INR (Rupee), although I have yet to receive confirmation from Coinome on whether this applies to XRP as well. Regardless, this new listing is a welcome addition to XRP’s presence on the subcontinent, and hopefully it adds to the amount of INR trading that we can utilize for the overall XRP network.
If you’re in Europe and want to participate in an XRP meetup, you’ll be interested to know that Claire Arthurs Kart, Ripple’s Head of Community, is organizing three potential gatherings. Ripple hasn’t committed to anybody specifically for these meetups, but is planning on fielding company representatives to meet with fans:
To participate, please access and fill out one of Clair’s questionnaires so she can plan for an appropriate venue and other factors. It’s great to see XRP’s European fans have an opportunity to meet with representatives from Ripple, as well as have an opportunity to connect in the brick-and-mortar world with each other.
XRP Symbol Voting Starts June 1st
The community effort at submitting XRP symbol designs for inclusion in the final vote has been happening steadily over the last two weeks, and the Twitter account leading the effort – @xrpsymbol – has communicated some high level information about the timeline:
“Voting is set to start on June 1st and last for one week.”
That means there is only one day left for new submissions at the time of this writing. Those that wish to submit a last-minute design need to keep in mind that there are some stringent guidelines before their proposal will be included in the formal vote:
- Images may not contain defamatory, controversial or graphic imagery.
- Submissions may not contain trademarked components. Submissions that impinge on existing marks will be removed prior to voting.
- Images must be easy to write by hand, and need to scale well (think 8 point font).
- A brief, written description of the symbolism must accompany each submission.
The information about the voting and submission timeline(s) can be found in the “FAQ” section of the website: https://xrpsymbol.com/
Voting itself will require users to authenticate with their Twitter login credentials. If they are a confirmed Twitter account, they will be allowed to vote once. @xrpsymbol indicated that three XRP community members helped him with the website, along with the subsequent Twitter authentication.
Any effort to arrive at a new design – for anything – necessarily involves personal taste and aesthetics; Not everybody will agree with the winner, but I can’t wait to see which symbol obtains the most votes.
Apple Stocks App
Apple Stocks is an iPhone application that allows users to keep up to date on finance information such as stock prices. Apple recently added XRP to their app, listing it with value pairings against other cryptocurrencies. One article speculates that this comprehensive listing is a signal that new global exchanges have decided to list XRP. 27
Whatever the reason or background, the listing on the Apple Stocks app created a certain level of buzz following the high-profile appearance by Ashton Kutcher on the Ellen DeGeneres Show.
Those that follow news about initial coin offerings (ICOs) may already have some cursory knowledge of the Naga wallet. The Naga ICO closed in December of 2017. They are now executing their business plan and have created a multi-currency wallet to allow investors to purchase and store various cryptocurrencies.
On May 24rth, the Naga team tweeted an announcement that they would be adding support for XRP:
The Naga wallet is one of the centerpieces of their ICO, and it is described as supporting a wide range of cryptocurrencies, including XRP: 28
“NAGA WALLET users can store, send, and withdraw all of the major cryptocurrencies, as well as 1,200+ ERC-20 tokens.”
There are several highly-reputable wallets that support XRP, however it’s always great to add another highly-functional option to the list. I look forward to hearing about the user experience of the first adopters that choose to purchase and store their “zerps” with this wallet.
Send XRP Via Text: Enhanced Website
The innovations were developed quickly by two XRP Community developers: @WietseWind and @baltazar223. While WietseWind developed a method whereby users can text XRP to other users – even those without an XRP wallet – baltazar223 developed an application that integrates with another popular messaging platform: Telegram.
The XRP community reacted with enthusiasm, helping to promote and use the two methods, and assisting with content for a central website to house user instructions, educational material, and Frequently Asked Questions (FAQ). If you’re interested in sending XRP to another person over SMS or Telegram, refer to the website here:
IMPORTANT WARNING: Usage of the SMS Text app is not free – the service is provided by 29, so fees are involved. Also, the two developers emphasized on the website that the project, while impressive, is still considered a ‘beta’ project. They issued this warning on the website for new users:
“Please note! This project is in public beta. There may be glitches.
I (we) won’t accept liability for any loss of funds.”
Other Developers Take Note:
In addition to providing yet another facet of the XRP ecosystem, these two projects also blazed a trail for other developers to follow. If you are a developer in search of some sample code or if you’re just plain interested in how they went about it, you can refer to the Github repository(s) here:
- SMS Text XRP: https://github.com/WietseWind/xrp-text
- Telegram XRP: https://github.com/N3TC4T/Ripple-Telegram-Bot
Tipping Point Achieved?
XRP will reach its tipping point with momentum to spare, and in fact it may have been reached already. What inspires my confidence regarding XRP’s success, and why do I believe that the tipping point for adoption of this digital asset is close – or even in the past already?
Malcom Gladwell is a Canadian author and speaker, and a noted expert in various sociological phenomenon. He’s authored numerous books, including “David and Goliath: Underdogs, Misfits, and the Art of Battling Giants” (2013) and “The Tipping Point: How Little Things Can Make a Big Difference” (2000). 30
He stated: 31
“The success of any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social gifts”
What are these gifts?
- Connectors: The people in a community who know large numbers of people and who are in the habit of making introductions.
- Mavens: The people we rely upon to connect us with new information.
- Salesmen: The charismatic people with powerful negotiation skills.
When I look at the above descriptions of the three groups largely responsible for social change, I cannot help but overlay the descriptions onto various people in both the XRP Community and those that work directly for Ripple, the company. In fact, I’d venture to say that some individuals seem to possess all three characteristics.
And when it comes to company leadership, each executive within Ripple rates highly against each of these three descriptions. When you conduct your own research into various other cryptocurrency networks, teams, and projects, look for yourself at the composition of the individuals involved and determine if they rate as strongly as the team that comprises Ripple. When it comes to real, tangible business results, there is no other fintech company that has achieved what many naysayers thought was impossible: the utilization of blockchain technology to achieve real-time settlement of payments across borders.
Thanks to four remittance companies verifying its cost savings, we are now looking to the world’s correspondence banks to follow suit; it’s time for the worlds’ economies to benefit by usage of XRP.