RIPPLE & REMITTANCE SERVICES
XRP is the third largest cryptocurrency, behind bitcoin and ethereum. Ripple, the company that created XRP—but claims it didn’t (because again, US securities law)—has long dreamed of using the digital unit for international transfers. Ripple CEO Brad Garlinghouse describes XRP as a “bridge currency,” which supposedly helps pre-fund international transfers. However, when pressed on XRP’s minimal liquidity in important trading pairs, like the Mexican Peso, he hasn’t given a satisfactory answer for why Ripple works—or what it could do to grow the market. Indeed, since he spoke to Quartz in November, the XRP/Mexican Peso pair has actually lost volume. Its daily trading is $490,000 compared to $600,000 in November.Remittance providers, like MoneyGram(which Ripple invested in) and Western Union, could also lose market share to Libra. It might be considered a long shot, but if populations in developing countries begin using Libra rather than their local currencies, then demand for currency conversions and transfers could diminish. A new global currency is an unusual business risk, but one that they’d be wise to recognize.