Report from the Federal Reserve on XRP

By Gaurav S. Iyer, IFC Published : December 1, 2017 pixabay.com/geralt As we’ve seen in recent days, XRP prices fall when Bitcoin crashes. That is a strange truth, because Ripple is, in many ways, the anti-Bitcoin. It is beloved by banks and hated by the Internet. Perhaps “hate” is an overstatement, though not by much. Critics claim that Ripple is, on the whole, a stooge of High Finance. It isn’t decentralized enough. It isn’t private enough. It is too comfortable working with banks. Here’s the thing: Ripple fans would agree with this characterization. However, many of them think these are reasons to be bullish on XRP. After all, Ripple’s structure allows it to be faster than Bitcoin. It also serves a specific function in the payments market. A report from the Federal Reserve Bank of Philadelphia summarizes these benefits quite nicely. “Ripple was founded in 2012 to provide global financial transactions and real-time cross-border payments. It has since been increasingly adopted by major banks and payment networks.” (Source: “Blockchain Disruption and Smart Contracts,” Federal Reserve Bank of Philadelphia, September 26, 2017.) The report went even further. It outlined a hypothetical scenario in which a Chicago-based woman, Alice, wants to send money to Bob in Africa. She could complete this transaction using current settlement technology, but it would take a long time to authenticate the transaction. Plus, the fees and friction of the transaction can get out of hand. In any case, the report runs through several blockchain solutions, including Bitcoin and Ripple. Here is what they had to say about XRP: “Now a system like Ripple, equipped with decentralized consensus (and almost real-time because it takes a few seconds per transaction), alleviates the concerns about Bob or Bob’s bank’s authenticity and functionality, and the use of contingent transfers ensures that if Bob violates the agreement, Alice’s fund is reverted back.” As you can see, the authors of this paper—two researchers at the Philly Fed—demonstrate a strong understanding of Ripple. Their language borders on advocacy at some points, which I take as a positive signal for XRP. The Internet may prefer Bitcoin’s rebellious streak in the short run, but cryptocurrencies that transform commerce will win in the long-run. Ripple appears to be cut from that cloth. Or at least that’s what I believe, what regulators believe, and what tech gurus like Michael Arrington believe. Ripple Price Chart: What’s Going on with Ripple Prices? On Friday morning, XRP dropped 3.19% against the U.S. dollar, bringing the Ripple to USD exchange rate down to $0.245374. At the same time, the Ripple to Bitcoin rate moved up almost three percent to 0.00002503 BTC. Analyst Take: We believe there is still hope for XRP to cross $0.40 this year. Thereafter, we continue to believe in our Ripple price prediction, which puts a $2.00 price target on the currency for 2018. Also Read: Ripple Price Predictions 2017: XRP Price Could Cross $1 Mark by End of Year