- During an interview at the Future of Fintech conference in New York, Ripple CTO David Schwartz explained the origins of xRapid.
- Schwartz said that xRapid is less volatile than fiat currencies because of its speed.
During an interview at the Future of Fintech conference in New York, Ripple CTO David Schwartz said that the company’s XRP-based payment solution xRapid is less volatile than fiat currency. He offered a fascinating insight into the origins and strategy behind xRapid, saying that it was created after Ripple ran into trouble convincing banks to adopt XRP for cross-border payments.
“I think we do have a struggle on our hands to convince particularly banks because banks are extremely conservative. They’re very slow moving. What we’ve discovered is non-bank financial institutions and payment companies are much, much more aggressive and they’re much more interested in things that can save them time and money and cost. And so we built the xRapid product as a way to kind of solve that problem.
And it was adapted to the real-life situation that we’re facing. We kind of had this idea that institutions would hold XRP or a digital asset. They’d make their payments with a digital asset, or regional hubs would settle with a digital asset, and for a variety of reasons the world wasn’t ready for that, including regulatory issues, lack of liquidity and an immature ecosystem around digital assets. So we couldn’t aim for sort of the end state that we wanted. We had to come up with a more practical plan.”
Schwartz also stated that xRapid was designed to remove the regulatory issues and concerns about digital assets volatility. He said that xRapid is less volatile than fiat currencies because of its speed.
“xRapid is aimed at two things. One of them is sort of remittance-type international flows, where cost is very high and the volatility actually favors a digital asset, which is kind of bizarre. Usually, people say the problem with digital assets is they have such volatility. But here, if you think about trying to pre-fund Mexican pesos on a Thursday to make payments on a Monday, that’s a lot of volatility in Mexican pesos.
Whereas if you can use XRP, which can move across the planet in just a couple of seconds, the volatility is actually less. Even though XRP is inherently more volatile, you’re only holding it for the minute or two it takes to complete the transaction.
And I think the other thing that xRapid handles is you might have a bank that doesn’t want to touch a digital asset. They’re like, ‘We can’t have XRP on our books. We can’t buy it, we can’t sell it. It’s just too much of a regulatory challenge for us.’ But let’s say they want to make a payment into Mexico and they don’t want to have to pre-fund and they don’t want to have to get confirmation three days later. What they can do is they can have an xRapid customer that probably won’t be a bank. It will be a payment company or some other type of institution that uses a digital asset to buy the Mexican pesos as an internal treasury function and then offers those Mexican pesos to the bank. So it’s a workaround to the limitations that we’ve found that we think is adapted to the situation that we’re in today.”
Speaking about the competition between XRP and other digital assets, Schwartz said that Ripple wants entire crypto and blockchain ecosystem to flourish.
“We need our competitors to succeed. We need the ecosystem to succeed. An analogy I sometimes make is your cell phone. Everybody in this room probably has a cell phone on them. And that would allow them to tweet about this talk right now. But they don’t own that cell phone to tweet about this talk. They hold that cell phone because there’s an entire ecosystem from Twitter’s competitors.
So Twitter doesn’t have to worry about how it gets people to have cell phones, how it gets people to have internet access. They just say, ‘Our target market is people with cell phones and internet access. And we have those cell phones because of prior competitors of Twitter, companies like Facebook and Myspace, and they built the internet.’ We need an ecosystem if digital assets are going to succeed. And Ripple’s not going to build that system single-handedly. Twitter can’t be in the cell phone business and the wifi business. They can’t be in every business and neither can we. And so, we want other digital assets to succeed.”
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Bitcoin price could retrace to $42,000 if US Nonfarm Payroll comes in at 180,000

Bitcoin price just like other assets, is highly impacted by the macro-financial developments. This includes the Nonfarm Payrolls (NFP) report released by the BLS of the United States. This time around, the NFP data is expected to cause a dip in the value of BTC.
Ripple is now only 3% away from becoming a bigger entity than Binance Coin
Ripple has overcome a lot of obstacles on its way to becoming the world’s fifth-largest cryptocurrency, as witnessed by the recent rise in XRP price. The native token of the world’s biggest crypto exchange, Binance Coin, on the other hand, has been moving in the opposite direction.
Ethereum leads altcoins north as Bitcoin halts amid bull trap fears

Ethereum (ETH) price remains northbound, unrelenting despite the king of cryptocurrency, Bitcoin, showing weakness. Behavior analytics tool Santiment observes that Ether and altcoins are on a tear even as BTC momentum fades.
BTC headstrong as Spot ETF talks reach technical stage

Bitcoin remains steadfast on the higher timeframe, amid news that spot BTC exchange-traded funds (ETF) discussions are now at the technical stage of approval. Specifically, talks with Spot BTC ETF issuers have advanced to key technical details, with Reuters indicating that it could signal a shift toward a potential approval.
Bitcoin Weekly Forecast: BTC uptrend capped by supply barrier at $43,860 as FOMO fails to suffice

Bitcoin (BTC) price uptrend has sustained since mid-September on the weekly timeframe but has since slowed down following the lack of tailwinds to drive the market. All along, narratives, themes and speculation were the driving factors, inspiring a wave of fear of missing out (FOMO) in the market. As it turns out, FOMO is not enough anymore.