The ripple price posted a double-digit advance on Thursday following the announcement of a major partnership with credit card giant American Express to process international payments.
Ripple Price Surges on AmEx Partnership
As CCN.com reported, American Express has partnered with Ripple, as well as British banking firm Santander UK, to create a blockchain payments channel between the U.S and U.K. The platform, which will operate on RippleNet, will reduce the settlement time for international payments from days to seconds.
Traders met the announcement with optimism, and the news immediately catalyzed a rally in the price of XRP — the native currency of the Ripple ecosystem.
The ripple price had been flat at $0.212 for most of the week, but it experienced a sudden spike at approximately 13:15 UTC. Within minutes, the ripple price had climbed to $0.272, and day-over-day trading volume had quadrupled.
The ripple price cooled off later in the day as volume continued to surge, and it is currently trading at $0.238. This represents a 24-hour increase of 13% and gives XRP a market cap of $9.2 billion.
Although the official announcement stated that Ripple’s real-time payments blockchain will be used to settle transactions made across the channel, it made no mention of XRP. Many investors do not realize that enterprises can adopt Ripple technology without integrating XRP into their products. Although XRP usage further reduces costs and decreases transaction times, many enterprises remain cautious about using a blockchain platform that directly integrates cryptocurrency usage.
“The technology we have developed, it separated a connection from the cryptocurrency or the token, Marcus Treacher, global head of strategic accounts at Ripple, told CNBC. “So what that means is that a bank or non-bank like AMEX can use Ripple to connect and just exchange value from one fiat currency to another directly, without the need for any intermediate blockchain currency.”
Consequently, there is no guarantee that the American Express international payments channel will feature XRP integration, and investors should be cautious about speculating on the future value of the cryptocurrency based on this announcement alone. Treacher maintains that Ripple is committed to promoting XRP and says that it “will come into play later on in the evolutionary dynamics and the other players,” but these implementations will likely not materialize until further on down the line.
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Last modified: March 4, 2021 5:01 PM