Ripple will have “dozens” of banks using its blockchain product that requires a digital currency known as XRP to work, the start-up’s CEO told CNBC on Tuesday.
The company is developing a solution that allows cross-border money transactions between banks in a faster and cheaper way than the current system allows. It’s based on a blockchain, the technology that underpins many cryptocurrencies.
It has a number of different blockchain-based products. One of those is xCurrent, which is currently in use by a number of banks, including Santander. It essentially makes the processes of checking information required to make transactions much quicker and does not require any cryptocurrency to work.
But Ripple also has another solution known as xRapid, a product aimed at institutions that have business in emerging markets.
Payments into emerging markets often require pre-funded local currency accounts around the world, meaning liquidity costs are high, Ripple explains on its website. Money would be sent into the xRapid system, converted into XRP to move it through Ripple’s product faster, then be converted back into whatever currency is required at the other end.
Because XRP has a four-second transaction time, this process would be quick. Some companies, such as Western Union and Moneygram, have begun trialing xRapid, but none have committed to it fully.
But Brad Garlinghouse, the CEO of Ripple, said that by the end of 2019, he expects many large institutions to be using it.
“I’ve publicly stated that by the end of this year I have every confidence that major banks will use XRapid as a liquidity tool,” Garlinghouse told CNBC in an interview at the Money 20/20 Europe fintech conference in Amsterdam, Netherland, that aired on TV on Tuesday.
“You know, by the end of next year, I would certainly hope that we would see you know in the order of… dozens.”
The XRP token is publicly traded on cryptocurrency exchanges. It traded at 67 cents on Tuesday. If large institutions began using the xRapid product, demand for XRP would theoretically rise given the large-scale transactions that would be taking place and could affect the price.