Ripple Names Its Preferred Exchanges for International PaymentsAug 17, 2018, 8:19AM
Ripple's international payment service has announced three exchange partnerships. It will make transactions cheaper, but is it too centralized?
Ripple has named three exchanges that are preferred in its xRapid payment system, a service targeted at banks that need to make cross-border payments between different fiat currencies. Any exchange can act as a Ripple gateway, but these exchanges were chosen for their volume of XRP liquidity.
Bittrex will be the preferred exchange for transactions involving USD, while Bitso will act as the preferred exchange when Mexican Pesos are concerned. Coins.ph will do the same for Philippine pesos. More international exchanges will be added as time goes on.
The potential benefits of xRapid are clear. Ron Hose, CEO of Coins.ph, noted that the partnership will make "sending money home more affordable for 10M+ overseas filipino workers." Elsewhere, a Ripple leader explained how the system works,
Any [U.S.] bank can go to Bittrex and have guaranteed liquidity on the spot, trade their dollars for XRP, zip over to Mexico to Bitso, our preferred partner there, and convert [to Mexican pesos] / Cory Johnson, Chief Market Strategist
This isn't a unique venture; Ripple actively seeks partnerships with banks and financial institutions. To some, this is a good sign that cryptocurrencies have a real use in the financial world. Advocates are encouraged by pilot tests, which have shown that xRapid has an advantage over traditional foreign exchanges and can cut costs by 40 to 70 percent.
However, Ripple's approach to adoption means that it is fairly controversial in the crypto community. Partnerships with financial institutions often breed accusations that Ripple is too centralized. And in segments of the crypto community that are pushing for decentralized exchanges, closer ties to centralized exchanges are unlikely to reflect well on Ripple. That said, xRapid is just one part of the Ripple project, and today's events alone may not have an obvious effect on the value of XRP.
Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.