Ripple controls a large pool of XRP, which is the third most valuable cryptocurrency in the world, and emerged in 2011 as one of the first competitors to Bitcoin. In recent years, the company has wagered its business on persuading financial institutions to use XRP as a “bridge currency” in cross-border transfers.
In an interview with Fortune, CEO Brad Garlinghouse said that Ripple currently has more than 300 clients. He expects Ripple’s customer base to grow 30-40% in 2020 and says that the volume of transactions on the company’s network will increase by more than 600%.
The $ 200 million investment, which was also backed by SBI and Route 66 Ventures, may help Ripple refute skeptics who say its technology is a solution in search of a problem is that why banks should adopt it.
Ripple’s clients include Moneygram, which Garlinghouse says now uses XRP for 15% of its transfers to Mexico.
As for the new round of funding, Garlinghouse cited a high level of investor interest in Ripple, saying the company did not need the money, although the funds will provide “balance sheet flexibility.” A spokesperson for Ripple said its plans for next year include hiring up to 150 new employees and adding offices abroad.
Garlinghouse declined to disclose details of Ripple’s revenue or operating profitability, but said the company sticks to its core strategy of promoting XRP adoption. While Ripple makes money by licensing its money transfer software, its priority is XRP, as the widespread adoption of the cryptocurrency would increase its price and allow the company to profit from the sale of its reserves.
A unit of XRP is currently selling for around 18 cents and, like other cryptocurrencies, it has plummeted in the last year.
While XRP may be more efficient than traditional methods (like wire transfers) for moving money across borders, skeptics wonder if there will be a role for Ripple in the future.
China is currently on the verge of issuing a digital version of the renminbi, while central banks in Canada, England and elsewhere are experimenting with digital versions of their own currencies. Meanwhile, Facebook is pushing ahead with its ambitious plans to use blockchain, the technology that underpins Bitcoin and XRP, to transform global payment systems. And banks like JP Morgan are launching so-called “stablecoins,” which are synthetic versions of the dollar tied to reserve funds.
If these projects go through, they could potentially undermine Ripple’s business model.
Garlinghouse says he is not concerned, noting that the central bank’s experiments focus on national currencies, not the movement of money across borders. And he says that banks and private companies are unlikely to adopt a stablecoin backed by one of its competitors, suggesting that the way is clear for XRP to grow as a cross-border money transfer instrument.
Historically, the number of times governments or large companies have been able to come together and execute something on this scale is rare, “he says. Bank of America or Citi will not use a JP Morgan coin.”
Garlinghouse is also unfazed by the drop in the price of XRP, which has almost halved since the beginning of the year. Some on social media have blamed the price drop on Ripple founder Jeb McCaleb, who abandoned his properties, a charge Garlinghouse refutes by noting that McCaleb is contractually obligated to sell only a small amount at price. hour.
Even as critics complain about XRP’s performance, and many in the crypto industry consider 2019 to be a painful year, Garlinghouse continues to get hyped.
“It has been a tremendous, tremendous year for Ripple,” he says, adding that the company will reveal more numbers and important announcements in early 2020.
