XRP vs Stablecoins: Will Ripple Ever Become Mainstream International Payment Processor?

Key Takeaways

• XRP peaked at a $132 billion market cap in 2018, but currently sees minimal real-world use.
• It remains the sixth most valuable cryptocurrency, but critics call it a “zombie coin” due to its lack of impact.
• Unlike Bitcoin and Ethereum, Ripple boasts partnerships with banks but hasn’t dethroned the SWIFT system yet.
• Ripple’s launch of a US dollar-backed stablecoin could provide a more stable and user-friendly payment option.

Riding the 2018 crypto frenzy , XRP peaked at a $132 billion market cap, briefly making co-founder Chris Larsen an $8 billion man.

Despite early ambitions, Ripple Labs currently sees minimal real-world financial activity . Few believe it’ll dethrone SWIFT, the dominant player handling trillions in daily bank transfers. Meanwhile, the growth of stablecoins threatens Ripple’s goal.

Notably, this aligns perfectly with Ripple Labs‘ target audience. While Bitcoin (BTC) and Ethereum (ETH) cater to broader audiences, Ripple explicitly targets the heavyweight players in the global financial sphere.

Conceived by Jed McCaleb and David Schwartz, the Ripple payments protocol has entranced the cryptocurrency sphere for an extensive period. Evolving continually, the cryptocurrency has solidified its position as one of the premier blockchain networks globally, garnering attention and forging strategic alliances with banks and financial institutions across the globe.

In its inaugural decade, numerous financial institutions, such as Bank of America and Banco Santander, eagerly joined Ripple’s pioneering network. To finance their ambitious venture, company executives issued 100 billion XRP tokens and sold $1.4 billion worth to the public. By early 2018, during a surge of cryptocurrency excitement, XRP reached a market cap of $132 billion, propelling cofounder and executive chairman Chris Larsen to a net worth of $8 billion.

High Price, Low Utility: Is Ripple’s XRP a $36 Billion Bluff?

However, Ripple Labs is often characterized as a “crypto zombie” because of its perceived lack of impact on global money flows and its failure to disrupt SWIFT, the Belgian banking cooperative which carries $5 trillion in daily interbank transfers.

Despite this, Ripple’s blockchain, primarily recording XRP transactions, continues to operate, albeit with limited utility. Despite that, XRP maintains a market value of $36 billion, making it the sixth biggest cryptocurrency. This contributes to cofounder Larsen’s estimated net worth of $3.2 billion – less than half his 2018 valuation.

Still, Ripple’s XRP ledger earned only $583,000 in fees  for processing transactions across its network last year. This, in turn, led to a high “price-to-sales” ratio of 61,689. While XRP tokens trade actively, primarily driven by speculation, alternatives like stablecoins such as Tether, with $100 billion in circulation, offer more efficient means for international blockchain payments.

Is Your Crypto Dead? Unveiling the $116 Billion Graveyard

Be it as it may, Ripple is not the only blockchain facing challenges. While Bitcoin and Ethereum dominate the blockchain landscape, over 50 blockchains, including at least 20 considered “functional zombies,” trade at values exceeding $1 billion. Despite this, the recent SEC approval of spot Bitcoin ETFs has propelled crypto markets to new heights. The 20 blockchains, with aspirations ranging from a universal world computer to an untraceable payments network, boast a combined market value of $116 billion , yet most have few active users.

However, the longevity of XRP and similar crypto projects is assured for the foreseeable future. With substantial reserves, Ripple and others can sustain operations for years to come. Ripple, for instance, holds $24 billion worth of XRP tokens in escrow , available for sale over the next four years.

Presently, the San Francisco-based company employs 900 individuals and continues to make moves, such as its recent acquisition of digital asset custody operation Standard Custody & Trust. Meanwhile, Ripple remains engaged in pilot crypto programs with central banks in various regions, including in Georgia and Palau.

Ripple Takes Aim at Mainstream with US Dollar Stablecoin Launch

About the Author

Teuta Franjkovic

Teuta is a seasoned writer and editor with more than 15 years of experience. She has expertise in covering macroeconomics and technology as well as the cryptocurrency and blockchain industries. She has worked for several publications as a journalist and editor, including Forbes, Bloomberg, CoinTelegraph, Coin Rivet, CoinSpeaker, VRWorld and Arcane Bear. Teuta began her professional career in 2005, working as a lifestyle writer at Cosmopolitan in Croatia. From there, she branched out to several other publications, covering mainly business and the economy. She then turned her attention to the world of cryptocurrency and blockchain, believing that crypto is among the most important inventions in the history of humanity. Her involvement in fintech began in 2014 and she has since lent her expertise in writing, editing and gathering information about the world of crypto, blockchain, NFTs and Web3. An all-round news hound, mentor, editor, and writer, Teuta enjoys teamwork and good communication. She holds a WSET2 diploma and has a thing for chablis, punkrock music and shoes. She also holds a double MA in Political science and Entrepreneurship.

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