For years, Ripple has tried to argue that its cryptocurrency network offers a faster and cheaper way to move money around the world than traditional financial institutions. But despite the tests with the big banks and Western Union, skeptics wonder when, if ever, Ripple’s service will catch up.
Now, however, Ripple, which owns a trove of XRP, the third most valuable cryptocurrency, may finally be moving towards its goal. On Wednesday, it announced a partnership with Azimo, one of Europe’s largest money transfer services, and that Ripple recently used XRP to move $ 24 million between the United States and Mexico in a single week.
The news helps support Ripple’s argument that XRP is useful as a “bridge currency,” helping financial institutions free up capital that would otherwise be tied up as reserves to facilitate international transfers.
In an interview with Fortune, Azimo CEO Richard Ambrose said that the use of Ripple’s XRP product, known as liquidity on demand, has saved the company between 30% and 50% when arranging currency transfers.
Ambrose described the process as a “fast and efficient bridge between the remittance markets.”
The most conspicuous of these was Ripple’s short-lived partnership with Western Union, whose CEO in 2018 publicly stated that using XRP had not reduced the cost of their business.
The failure of that partnership may explain Ripple’s decision to buy a 10% stake in MoneyGram. But in the second half of 2019, MoneyGram received more than $ 11 million from Ripple, raising questions about whether partners are using Ripple because they are being paid to do so.
Ambrose added that the payments are small compared to the cost savings that Azimo will get from using Ripple, which he says is often misunderstood.
Ambrose added that, for his company, Ripple and XRP are a means of reducing costs when organizing money transfers to countries such as the Philippines and Nigeria.
Asheesh Birla, Ripple’s senior vice president of product, pointed to the $ 24 million in transfers between the United States and Mexico and said they accounted for more than 3% of total remittances between the two countries that week. The increased volume, added, has also attracted market makers in XRP, which in turn drives higher demand for the cryptocurrency.
Meanwhile, Ripple CEO Brad Garlinghouse recently told CNN that he aspires to make Ripple the “Amazon of cryptocurrencies,” explaining that the retail giant started with books but then used its distribution network to add other products. . too. . He did not provide further details, but Birla stated that some of those new products will be released next year.
All of this may not be enough to crack down on critics of Ripple, who say the company is piling up unnecessary uses for XRP so it can sell its own cryptocurrency reserves. But at least for now, it appears that Ripple has momentum on its side.
