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Ripple CTO tries to offer answers for lack of adoption


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Community expectations have long been that banks would adopt XRP, but the reality has been disappointing.

Amid a difficult year for the payments-focused cryptocurrency, Ripple’s CTO David Schwartz has recently taken to Twitter to discuss with community members why banks have been reluctant to adopt XRP as a bridge.

During an exchange with a member of the Ripple community last week, Schwartz explained that there are a set of obstacles Ripple is facing that has led to banks' reluctance to use XRP to settle cross-border transactions.

Schwartz wrote that he sees issues such as, “Regulatory uncertainty, last mile problems, fear of reprisals from existing partners," as preventing widespread adoption.

Schwartz also stated that another reason for the banks’ reluctance to adopt XRP on a large scale is that the product is very new and it will take more time to gain the appropriate momentum.

The comments come amid a rough patch for the currency and its holders. XRP is down 18.6% on the year, and down over 90% from all-time highs.

Additionally, Paypal did not include XRP in its list of cryptocurrencies it would offer, and the company is facing an intellectual property lawsuit in Australia over its “PayID” branded payment standard.

https://cointelegraph.com/news/ripple-cto-tries-to-offer-answers-for-lack-of-adoption

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From a macro view, understand that banks aren't going to adopt tech that doesn't immediately profit them in some way.  The current Ripple business models could potentially replace the entire correspondent banking system.

Every time a bank touches a transaction they're skimming service fees and in some of these complex transactions 5 or 6 separate entities are all taking a cut of the transaction.  A typical transaction could be: origin bank -> intermediary bank 1 -> intermediary bank 2 -> intermediary bank 3 -> destination bank.  Every bank takes some off the top as it moves down this long and winding 19th century fireman's bucket relay.

Now someone, New Kids On The Block, comes along and says, "We have a better way and we can eliminate your fees altogether."

As a money sender you're saying, "AWESOME, I send $100 and they receive all $100!"

As a bank you're saying, "Awww hell nahhh, we want our fees."

It's like going to the trucker's union and telling them every truck will be driven by Telsa automated trucks in 5 years time.  That's when the shotguns and baseball bats come out; they won't go quietly into the night, even if it's inevitable.

~~~~~~~~~~

You got these groups like JP Morgan, et al, fudding crypto with one hand while finding a way to gain exposure to the asset class with the other hand, while it's still cheap to do so.

"We'll never buy Bitcoin" becomes, "Well...(now that we've set ourselves up to profit by buying and shorting markets and getting exposure through proxies like Grayscale and Kraken)...mayyyybe crypto is an asset class worth looking into."

Once they find a way to profit off using XRP, regardless of the fact that XRP could destroy this entire 1970's-era cash cow, they'll be all in. The tech works obviously, quite well actually I'd say, but self-preservation is a strong instinct.

Look at the SWIFT GPI they came out with that's trying to compete with XRP; they had 40 years to come up with something better/improve/adapt, but only now that someone's come to eat their lunch do they even make a lazy effort to 'update' their antiquated tech.

If SWIFT really weren't concerned about XRP taking over everything, they'd just sit back and keep collecting on their cash cow a la "No one will ever use XRP, pffffft, it's so much cheaper and faster than using SWIFT 1.0....wait, wait a sec, we need SWIFT 2.0. Hurry, cook something up."

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54 minutes ago, xerxesramesepolybius said:

That kind of points to a rather fundamental problem and Ripple can’t afford to subsidise every remittance company to give the impression odl works

I could see it going a couple of ways; M&A or some kind of 5 families mafia-style arrangement.

Obviously banks don't want to just give a way the farm to some 'valley tech startup'.  Either they (banking cartel, PayPal, FAANG) will try to absorb the upcoming players like Kraken, Ripple and take their tech or maybe just leave them be to work in certain areas until they figure out how to compete.

It's clear the tech is superior, I think it's more a matter of entrenched interests right now. I assume Ripple would like to eventually run it all through XRP, but there'd have to be some serious deal-making for the established players to accept that.

Personally I hate waiting for checks to clear between banks, it's so silly in the internet age. ACH pisses me off. Banks across the street from each other take days sometimes to settle, it makes no sense. But I can walk out of one with cash and into the other and do it in a couple minutes? XRP settles in seconds.

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1 hour ago, jetbrzzz said:

Personally I hate waiting for checks to clear between banks, it's so silly in the internet age. ACH pisses me off. Banks across the street from each other take days sometimes to settle

Move to a developed country like EU, UK or India, they all have faster payments system. Near instant transfers between banks for free. 

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4 hours ago, xerxesramesepolybius said:

In what way?

Correspondent banking vs XRP, settling transactions in seconds not days for pennies on the dollar. In terms of time and cost it's not even close.

Even SWIFT's new GPI isn't a settlement system, it's just a faster messaging system, still going through the same path as the old system. They were trying to implement TIPS to actually settle transactions( Europe) after it plods through the bucket relay messaging system but really that's just a bolt-on solution, if you can call it that.

There's a huge difference between:

"Bob says he gave yo' money to Alice who gave it to Steve who took some & gave the rest to Tyrone who will be back in town in 2 days cause Tyrone don't do weekends."

versus,

"Bob got yo' money."

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12 hours ago, xerxesramesepolybius said:

Move to a developed country like EU, UK or India, they all have faster payments system. Near instant transfers between banks for free. 

Banks don't do anything for free...I don't know, but I assume banks in these "developed countries" as you call them charge you various fees, though perhaps not for transfers per se.

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2 hours ago, xrpmeplease said:

Banks don't do anything for free...I don't know, but I assume banks in these "developed countries" as you call them charge you various fees, though perhaps not for transfers per se.

They just don’t charge

 

2 hours ago, xrpmeplease said:

Banks don't do anything for free...I don't know, but I assume banks in these "developed countries" as you call them charge you various fees, though perhaps not for transfers per se.

https://en.m.wikipedia.org/wiki/Payment_and_settlement_systems_in_India
dear Americans you just have to face the fact that much of the world has far better payments infrastructure (often cor decades) that is cheap, fast, often 24*7 and has no need of Ripple.

In many countries (including the US if you look hard enough) there are often international payments options that coat pennies per dollar.

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10 hours ago, jetbrzzz said:

Correspondent banking vs XRP, settling transactions in seconds not days for pennies on the dollar. In terms of time and cost it's not even close.

Even SWIFT's new GPI isn't a settlement system, it's just a faster messaging system, still going through the same path as the old system. They were trying to implement TIPS to actually settle transactions( Europe) after it plods through the bucket relay messaging system but really that's just a bolt-on solution, if you can call it that.

There's a huge difference between:

"Bob says he gave yo' money to Alice who gave it to Steve who took some & gave the rest to Tyrone who will be back in town in 2 days cause Tyrone don't do weekends."

versus,

"Bob got yo' money."

The only thing It settles in Seconds are XRP transfers and the problem with that is that XRP can’t be used to buy much.

Look at ODL, the movements in Fiat are done through conventional payments infrastructure and banks.

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2 hours ago, xrpmeplease said:

Banks don't do anything for free...I don't know, but I assume banks in these "developed countries" as you call them charge you various fees, though perhaps not for transfers per se.

In europe there is no charge on transfers between the eurozone and the payments are settled within 24 hours. So yes, you don´t know.

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3 hours ago, xerxesramesepolybius said:

The only thing It settles in Seconds are XRP transfers and the problem with that is that XRP can’t be used to buy much.

 

You're assuming it's a currency, I see its function as commodity-based. You can't buy groceries with crude oil, cotton or soybeans.

I guess you don't know about the counter currency function built into the XRP ledger/protocol. You can exchange the base currency (XRP) or counter currency aka other pairs, BTC_XRP, USD_XRP, ETH_XRP, CNY_XRP, etc.

This is specifically why Greg Kidd went to work for Ripple back in the day, because of that extra column in the ledger called counter currency, which means you can 'translate' any value into anything else with value through XRP.

In other words, you can go from any currency (fiat if you chose) to XRP to any currency (foreign fiat if you wanted) in 2 transactions that take seconds each to settle for pennies if not less.

https://xrpl.org/list-xrp-as-an-exchange.html

https://www.youtube.com/watch?v=Tz0iHOpkWMc

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5 hours ago, xerxesramesepolybius said:

In many countries (including the US if you look hard enough) there are often international payments options that coat pennies per dollar.

I don't live in the US...and pennies per dollars isn't free, get your story straight.

FWIW, I wasn't advocating anything with my post, just pointing out that banks aren't in the business of "free", as you asserted.

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