Ripple Eyes China’s Billion-Dollar Payment Market
Ripple is looking to tap into the Chinese market with its distributed ledger technology (DLT) in order to speed up the cross-border payment, a Ripple executive told CNBC on August 15. However, the initiative seems unlikely to advance the wider adoption of the platform’s cryptocurrency, XRP.
Jeremy Light, vice president of European Union strategic accounts at Ripple, said in the telephone interview that “China is definitely of interest, it is definitely a target. China is definitely a country and region of interest.”
Ripple, serving as a payment processing system, is best known for its digital token. The price of XRP hit record high of $3.81 on January 4, according to CoinmarketCap. Amid the crypto market slump, XRP, though still the third largest cryptocurrency by market cap, has receded to just 31 cents, a decrease of over 90 percent.
Many Ripple fans think XRP is an alternative version of Bitcoin which is favored by many merchants and financial institutions. However, this is not the case. In the long list of Ripple’s partners, including Santander, UBS, and Standard Charter, most banks appear to favour a Ripple product known as xCurrent rather than XRP tokens. xCurrent is tailored to work with financial institutions by allowing banks to confirm payment details in real time before each transaction and after each delivery.
In February, Chinese financial service provider LianLian Pay has partnered with Ripple to use xCurrent for faster remittance and cross-border e-commerce payments into China.
Ripple’s entry into China is still hamstrung by many problems now. Given that Chinese authorities have adopted tough stance on cryptocurrency trading and ICO-related activities, it is impossible to realize the wide adoption of XRP in the country now.
Besides, Ripple will face fierce competition from established payment processing services in the nation too.Ant Financial’s Alipay and Tencent’s WeChat Pay have developed mature payment solutions for locals, pushing China to develop into a cashless society. It remains unclear whether Ripple’s strategy will work in the country.