Yesterday, the Ripple price (well technically the price of XRP, the digital asset underlying the Ripple platform) increased from around $0.29 to $0.33. Its market capitalization, via CoinMarketCap, followed suit, increasing by some $1.7 billion. What extraordinarily good news could have brought this surge on?
It’s unclear. The surge aligned with news that R3, a blockchain consortium comprising several major banks (including Credit Suisse and Goldman Sachs), had announced a partnership with global payments provider SWIFT. The two are set to begin trialling R3’s “Corda” blockchain platform, which settles cross-border payments—very much in SWIFT’s ballpark. SWIFT will trial Corda for use on its flagship “Global Payments Innovation platform,” or GPI, whose website boasts of processing some $300 billion in cross-border payments each day.
This is hardly an obvious boon for Ripple, which has long sought to dethrone SWIFT. It bills its xRapid and xCurrent solutions, which partly rely on the XRP cryptocurrency, as the future of cross-border trading, but has yet to gain the same kind of high-level approval as R3’s Corda. R3 and Ripple, indeed, are something of sworn enemies—they recently settled a multibillion dollar lawsuit over the alleged violation of a deal. That R3 openly discussed the gambit during a panel with Ripple chief Brad Garlinghouse seemed like an additional slap in the face.
But somehow, XRP fans are seeing the news as a positive development for the company. Some cite Ripple CTO Joel Katz, who said on Reddit last year that such a development would “not necessarily be bad for Ripple,” saying R3’s leap ahead meant either two things: a) by jumping into the “instant settlements” fray, SWIFT would drive wider consumer demand for the solutions Ripple believes it can better provide, or b) SWIFT would build a “walled garden” around its technology and push consumers to Ripple’s more “open” software. So either way, Katz said, “we’ll win.” (“We,” being Ripple, not Decrypt. As if we care.)
It makes sense. Ripple wants to replace SWIFT, not ally with it (and be subsumed by it). Garlinghouse, speaking last year after rumors of a Ripple/SWIFT collaboration were debunked, explained it thus: “What we’re doing and executing on a day-by-day basis is, in fact, taking over SWIFT.”
Ripple fan Don Smith compares Ripple’s strategy with that of Tesla. “I think an analogy is like the car companies ignoring the electric car in the 80s and 90s, and then along comes Tesla,” he tells Decrypt. “That forces companies to come out with something, which makes Tesla look more legitimate.”
But what about the rest of the Ripple rank-and-file? These, presumably, are the ones responsible for the surge in Ripple price—how are they interpreting the news?
There may be a simple explanation. A news ticker atop R3’s website cites XRP as Corda’s “first settlement mechanism.” The news dates back to December 5, 2018, but effectively means that XRP—which is supposedly distinct from Ripple the company (though this too is the subject of an ongoing class action lawsuit)—would be used by Corda’s newly SWIFT-integrated platform as a so-called “bridge currency,” which means banks separated by borders will be able to use it as a common point of exchange.
“It basically means they are in the same partnership group as Ripple,” explained “catman,” an admin on Ripple’s official Telegram group. “Using the r3 [sic] system means they can inter operate [sic] with each other more easily.”
Telegram user “Forbes” put it more bluntly. “We’ve invested in xrp”—XRP being the currency, not the company. XRP investors don’t care whether or not Ripple the company will change the world. But XRP the currency is slated to be part of R3’s massive SWIFT collaboration. And that, my children, is enough of a pretext to pump the price.