Ripple Cryptocurrency Woos China’s Central Bank
(As featured on Investopedia- September 5, 2017)
Written by: Prableen Bajpai
Ripple is a venture-backed startup that provides global financial settlement solutions that reduce the total cost of settlement by enabling banks to transact directly and instantly, while ensuring certainty. It aims to “enable the world to exchange value like it already exchanges information—giving rise to an Internet of Value (IoV).” Over time, ripple has expanded its customer base across geographies by adding some of the most reputed banks and financial institutions as its partners.
A recent tweet by Ripple, reflects its intent to expand in China—something that lucrative but not easy. As per a report, People’s Bank of China (PBOC) has been carrying out trails related to transactions and settlements of bank acceptance bills using a digital currency. However, China is strict in terms of regulations and has recently issued a ban on Initial Coin Offerings (ICOs) till further review. In February 2017, major Bitcoin exchanges in China had halted withdrawals in cryptocurrency after pressure from regulators. The Chinese Bitcoin exchanges resumed normal operations, allowing withdrawals after nearly a four-month freeze. Back in 2013, the government banned financial institutions from trading in bitcoin. (Related reading, see: Are There SEC Guidelines on ICOs?)
XRP, Ripple’s digital currency, enables real-time global payments anywhere in the world. It is the third most prominent cryptocurrency in terms of market capitalization and has performed extremely well during 2017.
While Ripple belongs to the category of cryptocurrencies, its purpose is different from that of Bitcoin or Ethereum. While Bitcoin is a payment method and Ethereum is a multifunctional platform for decentralized SmartContracts, Ripple is a decentralized solution for banks and financial institutions that is fast (4 seconds) and scalable (1,000 transactions per second).
Ripple acts as both a cryptocurrency and a digital payment network for financial transactions. “Built for enterprise use, XRP offers banks and payment providers a reliable, on demand option to source liquidity for cross-border payments,” says the firm.
XRP has enjoyed a rally this year in line with the trend in the crypto space. It rose from $0.006523 to touch a high of $0.405655 in mid-May, a surge of more than 6000%. It’s now trading at $0.208975 levels and is the fourth largest cryptocurrency in terms of market capitalization. It’s been switching places between the third and fourth spot since the emerging of Bitcoin Cash. (Related reading, see: Ripple Is Emerging as a Stable and Trusted Cryptocurrency)
*Price of XRP at 4:00 AM, ET, September 5, 2017
Find the link to the full story below: http://www.investopedia.com/news/ripple-china-central-bank-cryptocurrency/