The current financial system is limited by its own history, and what came before it. However, every once in a while, we hear about new financial concepts that seem to re-invigorate people and open new markets, or change existing ones. Uber and Airbnb are two contemporary examples that spring to mind. Both prompted sharing-economy applications such as Omni and others to take the leap and unlock the hidden value in what would ordinarily be considered dormant or shared property.
Fund-raising has also benefited from a creative re-invention by several Silicon Valley companies. Notably, one of Ripple's founders - Chris Larsen - was involved in founding an early Internet-based loan company. 1
Perhaps it was this experience that taught him that technology was 'just getting started' when it came to finance. Whatever the case, Ripple's suite of products are performing a rolling takeover of banking's back-end processing for cross-border value transfer. And it's no wonder: Ripple's products replace the old global correspondence banking system with real-time settlement.
This use case has been measured by correspondence banking's current volume, but the great unknown - and it is great - is what the effect on global payment volume will be based on moving a costly, time-consuming transaction to 'real-time and nearly free.' There are some that believe that what happened to the number of interpersonal communications in moving from postal mail to email will be a good measuring stick. 2 If that holds true, then the global economy is about to be supercharged anywhere that Ripple's technology is being used as a replacement for SWIFT messaging!
While xCurrent is Ripple's solution for SWIFT messaging replacement, xRapid is their solution for Nostro account replacement - part of the same overall strategy. What could be bigger than a sizable chunk of correspondence banking utilizing XRP for settlement?
That is the question that has recently been speculated upon, but not enough attention is being given to some of these other components, like Codius, ILP, and XRP's native ability to process asynchronous transactions, known as Payment Channels. When analysts and writers consider these use cases, they are constrained by 'what is' rather than 'what will be.'
I'm old enough to remember Netflix challenging Blockbuster. I honestly didn't think they had a chance; after all, Blockbuster had enormous market share, and here was a startup that wanted to mail videos, and then later, stream content over the Internet? While I understood the mail-based subscription model, I thought Internet streaming was preposterous; after all, Internet speed was unreliable in a large percentage of locations, and I couldn't see Internet Service Providers (ISPs) building the kind of infrastructure that could support such large data transmissions. Streaming movies was something I regarded with great skepticism. I had trouble visualizing it.
But it happened. And it was big... very big.
The same thing is now true of Codius smart contracts. I encounter some people that have trouble imagining how Codius could be used to create whole new asset classes, or make certain business contracts that were previously unprofitable, suddenly worthwhile.
And micropayments? Coil? They are on the brink of a global takeover in web content payments. The XRP Community has already created tutorials on how to enable Coil on Wix and WordPress websites, which could enable millions of content creators to start accepting micropayments via XRP. My guess is that the team at Coil was unprepared for how quickly their concept would catch on, and there are now many first adopters eagerly awaiting the payment side of their application to be 'switched on.'
This is just the start for XRP and its ecosystem of tools; and it's been made clear time and again that the only limit for new entrepreneurs and businesses is their - and their customers' - imagination.
Ripple News
Ripple changed its approach to announcing new bank partnerships in RippleNet after the pace of contracts accelerated in 2017, making piece-meal announcements impractical. However, occasionally the company will pause to update the banking and financial institution space with news that they wish to highlight in support of their overall business and marketing plans. One of these exceptions was on display on Thursday, September, 13th, when they formally unveiled NCB (National Commercial Bank) of Saudi Arabia as the newest member of RippleNet. 3
NCB is one of the oldest banks in Saudi Arabia, founded in 1953. 4 It is the second largest bank in the Middle East, with total assets measuring $120 billion dollars. It's headquartered in Jeddah, Saudi Arabia, on the coast of the Red Sea.
The Ripple Insight announcement discussed the bank's location and important role in facilitating cross-border remittances from the country, noting that there are currently more than ten million foreign workers living in Saudi Arabia who periodically send money home using small-to-medium sized enterprises (SMEs). Note that this is one of Ripple's focus groups for xCurrent adoption, as described in a recent video released by the company.
Ripple's Insight article stated:
"The bank will first connect to financial institutions in North America and Asia, starting in Singapore. Launching these two critical payments corridors out of the gate offers immediate value to NCB’s customers — services in regions that they have not had access to before."
This quote indicates that Ripple adoption is accelerating in the retail remittance corridor in all areas of Asia and the Middle East, with NCB being the latest in a series of corridors served by applications built on Ripple technology: SBI Remit (Japan-to-Thailand) , MoneyTap (domestic JPY payments), One Pay FX (UK-Eurozone-Brazil-Spain-Poland), and Cross (South Korea-Asia).
It's become quite clear that Ripple is making substantial progress on their plan to become the new plumbing of worldwide cross-border transfer and real-time settlement. Applications built on Ripple technology are not just 'banking islands' but reflect a commitment to technology architectures that truly bring the world out of the aging correspondence banking paradigm and into the modern era.
Milken Institute Asia Summit 2018
The Milken Institute - Asia Center analyzes demographic trends, trade relationships and capital flows that affect Asia. 5 According to their own material, the umbrella organization (Milken Institute) is: 6
"...a nonprofit, nonpartisan think tank determined to increase global prosperity by advancing collaborative solutions that widen access to capital, create jobs and improve health. We do this through independent, data-driven research, action-oriented meetings, and meaningful policy initiatives."
Between September 13-14, the institute organized a conference called the "Asia Summit 2018" which featured a variety of speakers, including Cory Johnson, Ripple's Chief Market Strategist:
Lara Wozniak, Accenture Growth Markets Media Relations Lead, interviewed Cory Johnson during the conference. Some of those questions & answers included:
Question: "So how do we get people ready for that? (blockchain technology used for finance)"
Answer: "People are ready for it now. People are sick of paying the highest charges. Why does it take three or four days to move money across a border when I can send a text message in five seconds? That's unacceptable in this society, and I think people are ready for that change right now."
Question: "Are the regulators ready?"
Answer: "I think the regulators are trying to figure out the speculation... And that has the regulators scared about what blockchain might be in some cases....
...when we meet with regulators, I've personally been really surprised by how much they know, and how much they want to know. They don't walk into this with a notion of fear and doubt - they actually want to listen and learn."
Question: "What do you think is the realistic timeline for this?"
Answer: "...The entrepreneurs aren't waiting. The entrepreneurs all over the world are developing solutions using blockchain, using digital assets.
For example, we use a digital asset called XRP. We see lots of other entrepreneurs using XRP. Now, we're further ahead than they are, but they're not waiting for government; and if the governments that are hostile to these solutions don't become un-hostile, they're (the entrepreneurs) going to pick up and go somewhere like Singapore, like Switzerland, like Malta, like Liechtenstein, like Estonia... who have really embraced these technologies, and want to see those businesses grow."
This commentary by Cory Johnson on the pace of regulation within the United States and other stakeholder nation-states is consistent with many recent statements made by Ripple executives. It's also consistent with SBI's reluctance to 'flip the switch' on real-time trading of XRP unless further clarification is received from Japan's regulators.
The lack of regulatory guidance on the topic of digital assets is causing many businesses to source their base of operations in other countries; it's not just idle speculation from Cory Johnson. To stop this trend from continuing, and to pave the way for new blockchain businesses to continue to innovate within the US, regulatory guidance is needed. Thus far, the regulators have been inactive and silent on several very important 'sticking points' for entrepreneurs, new business owners, and investors. Ripple is one of many businesses that need this clarification.
CNBC Quoting Sagar Sarbhai
On September 17th, CNBC published an article that discussed Ripple's road-map and progress for xRapid, its liquidity-sourcing solution that utilizes XRP to transfer value across borders. It correctly indicated that more than 120 banks are partnered with Ripple, and are using xCurrent. 7
In addition, it quoted Sagar Sarbhai about xRapid's deployment schedule:
"I am very confident that in the next one month or so you will see some good news coming in where we launch the product live in production."
This will indicate that xRapid is no longer considered 'in beta' and has progressed to its first production-ready iteration for both remittance processors and banks. This announcement is consistent with other quotes provided by Ripple executives, and it's good to see the message being covered by mainstream media sources such as CNBC.
New Positions at Ripple
Ripple is growing fast. To keep pace with the increasing market demand for products and services, the company has recently been promoting some of their open positions using Twitter, with Jim Chauncey-Kelly, Ripple's Director of Talent Acquisition, linking to the official postings at Ripple.com:
There are 44 open positions at Ripple as of September 16th, and some of these indicate an increasingly global focus by the organization, with the countries of India, Singapore, Brazil, and China represented. The other positions are either not specified, indicating a global focus, or else are listed as the United Kingdom or the United States.
This list is reflective of a fast-growing software company that is clearly setting its sights on international expansion and development, and some of the open positions telegraph Ripple's intentions with regards to their business strategy as well. For example, it's interesting to note that one of the open positions is "Legal Counsel (Singapore)." One might be able to deduce that Ripple is exploring the implications for a high-volume corridor to that country.
Take a look if you're interested, or know somebody that may be a good fit for the Silicon Valley company: Link to Ripple Open Positions.
Coil News
Content creators are itching for Coil to start up their payments service. I've been seeing more than one online step-by-step guide for integrating Coil with independent websites, and one of the more recent guides was specifically focused on integration of WordPress sites, which is a huge market:
How big is WordPress? According to one researcher, WordPress is the fastest growing content management system, with approximately five hundred new sites built daily. Between 50-60% of the global content management system market is handled by the platform, and 2,645 of the top 10,000 websites in the world use it.
To learn more about how WordPress operators can integrate with coil, readers can take a look directly at the blog linked through the previous Tweet:
WordPress-Coil Integration Blog Site
Testing Your Coil Integration
For those web content creators that wish to check their Coil integration to ensure that it's working, WietseWind created a simple yet effective tool for them to do this:
WietseWind, as usual, made the tool very easy-to-use: The website owner is only required to enter their website URL into a text box and hit the "Check" button:
In addition to the checker, he is publishing the names of the websites entered, so be aware that your site will now be added to that list; it benefits the sites by promoting an initial list of Coil site operators, meaning that users of Coil can know in advance what sites will be supported if they actively browse! It's the first instance of a Coil directory, despite its informal nature.
Again, WietseWind is blazing the trails for web monetization, parallel to Coil's own efforts.
XRP News
Version 1.1.0 of the XRP Ledger was officially released two days ago. 8
The amendments included a function for allowing users to pre-authorize incoming transactions to an account, mirroring today's traditional 'pre-notification' process with a real-time alternative. Using this feature, it allows the white-listing of specific sender addresses, paving the way for functionality that may prove useful for future bank integrations.
In addition, this new version includes approved amendments for enhanced variant checking and deprecates two unneeded commands.
Validator owners are recommended to upgrade to version 1.1.0 by Thursday, September 27th, reflecting the two-week amendment support timeline. 9
XRP Will Not Be Constrained By Limited Thinking
Albert Einstein, who is held in such high regard that future generations of physicists would treat his theories as unassailable, was one of the individuals that felt the need to remind his admirers that: 10
"Imagination is more important than knowledge. For knowledge is limited, whereas imagination embraces the entire world, stimulating progress, giving birth to evolution."
XRP was created by those technology architects that clearly viewed the future needs of the Internet of Value - something that Chris Larsen has consistently expounded upon. And XRP's champions are positioned to alter the course of financial history by creating the underlying frameworks, standards, and tools that entrepreneurs and inventors need to create innovations not yet envisioned by their contemporaries.
What will these innovations look like?
Perhaps whole new derivative instruments that ordinary people can leverage to activate their unused savings? Or maybe peer-to-peer crypto loans? These are but a couple ideas I've heard in the past month from others on social media, and while they are definitely meritorious, something tells me that the biggest innovations have yet to be designed or developed.
For those that have chosen to follow XRP's journey, discussion of these possibilities is beginning to enter an entirely new phase - one in which the original visions of XRP's creators are now starting to take shape in the form of concrete business progress and new financial innovations.
Sources and Credits:
Cover Art: Thank you to Quentin Kemmel
- https://en.wikipedia.org/wiki/E-Loan
- https://ripple.com/files/fsr_gifford_cheng.pdf (p. 144)
- https://ripple.com/insights/national-commercial-bank-of-saudi-arabia-joins-ripplenet/
- https://en.wikipedia.org/wiki/National_Commercial_Bank
- https://www.milkeninstitute.org/issues/
- https://www.milkeninstitute.org/about/
- https://www.cnbc.com/2018/09/17/ripple-hints-cryptocurrency-product-xrapid-will-go-live-soon.html
- https://github.com/ripple/rippled/releases/tag/1.1.0
- https://developers.ripple.com/amendments.html
- https://en.wikiversity.org/wiki/Talk:Albert_Einstein_quote
