Payments company Ripple says it plans to invest in startups and technology companies to develop more uses for XRP, its cryptocurrency that is currently the third largest digital token behind bitcoin and Ethereum based on total market cap.
The value of XRP shot up in December and January following a crypto market rally that saw bitcoin reach nearly $20,000 per coin. The collective value of XRP was worth more than $128 billion at peak before a market crash in January walked those prices back significantly. Today, the token has a total market cap of around $30 billion but Ripple has come under fire for a perceived lack of use for XRP, which has been marketed as a tool for banks but has attracted only cross-border payment services as customers.
Speaking on the sidelines at Money2020 in Singapore, Ripple CEO Brad Garlinghouse told TechCrunch that Ripple is staying focused on enabling banks to use its software solutions — a mix of services, some of which don’t utilize XRP — but it is eying investments in companies that could offer alternative uses for XRP.
“We, Ripple, will stay focused on solving that institutional use case, but we would certainly partner with companies that are looking to use XRP in lots of different ways,” said Garlinghouse, whose net worth was pegged at “at least $9.5 billion” by Forbes in January.
Garlinghouse said that Omni, a San Francisco-based startup that offers storage and rental services for goods, is a blueprint for that plan. Ripple and two of its executives led a $25 million investment in Omni in January and the startup has agreed to introduce XRP within its service.
“You should expect that you’ll see more of those,” Garlinghouse said.
Ripple is not the only company preparing to use the windfall of a highly-valued crypto token to advance its business or ecosystem. At least half a dozen companies that raised capital using ICOs are planning investment vehicles that would put money into companies that could use their product or platform, sources within the industry have told TechCrunch. Last month, a collective of prominent blockchain companies banded together to launch a $100 million grant fund that could also expand to cover for-profit investing, too.
In Ripple’s case, however, using XRP for micro-payments and marketplaces represents a much different value proposition from its core proposal, which is a cryptocurrency that banks and financial institutions will use.
Ripple has been criticized for failing to attract banks to XRP, with its public customer base consisting of cross-border remittance services that are trialing XRP as one currency within their payment flows.
Responding to a question on stage at Money2020, Garlinghouse said concerns around volatility in XRP for payment services are “fake news.”
The Ripple CEO pointed out that with payment completion taking a number of seconds, the bumpy highs and lows of crypto wouldn’t impact a sale directly. The question remains, then, why banks aren’t adopting XRP. Garlinghouse believes it’ll take time but change will come.
He noted a similarity in the emergence of VoIP — he previously founded VoIP company DialPad, which was acquired by Yahoo — which, he said, current AT&T chairman Randall Stephenson once said would never take off. Today, it has become standard.
The big question for Ripple’s expansion into alternative uses for XRP, are whether it can find the right partners to give it some meaning. For now, Ripple looks to some like an asset that’s seeking justification for its valuation.
Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:
https://techcrunch.com/2018/03/13/ripple-wants-to-invest-in-startups-that-will-put-its-xrp-cryptocurrency-to-work/
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit