For starters, xRapid is a solution that use XRP for liquidity in key markets. This means that banks that use XRP as a bridge currency can have faster payments and lower transaction costs. Meanwhile, Ripple is a rapid transactions platform that can fundamentally transform the cross-border transactions. This solution is, therefore, an extension of that vision. The Ripple website describes xRapid as follows:
Binance CEO Changpeng Zhao has hinted that the exchange plans to partner with Ripple and leverage its XRP solution–xRapid. This is certainly significant because Binance is the world’s largest exchange by adjusted volumes moving billions in trading volumes on a daily basis. This alliance is mutually beneficial for both sides. This is because Binance is looking to improve its market share and presence. On the other hand, xRapid is a rapid transaction catalyst suitable for institutional use. The fact that Binance now has Over the Counter (OTC) trading makes it even better.
The Ripple website describes xRapid as follows:
‘’xRapid is for payment providers and other financial institutions who want to minimize liquidity costs while improving their customer experience. Because payments into emerging markets often require pre-funded local currency accounts around the world, liquidity costs are high. XRapid dramatically lowers the capital requirements for liquidity.’’
Accordingly, this solution will give payment providers and such financial institutions low-cost liquidity. This is more so for emerging markets where payment providers need pre-funded local currency accounts worldwide. As such, xRapid lowers capital requirements for liquidity.
Binance – xRapid Link
Binance has not offered precise details of this partnership and the CEO only addressed the position that the exchange intends to leverage xRapid. Zhao said:
“We’re focused on launching more features right now, so we are working with a number of other partners. With xRapid, there’s nothing going on right now, but in the future, we’ll definitely want to add them as a partner.”
Ripple will certainly add to its list of exchange partners with Bittrex and Bitstamp already on the list. This means that xRapid can extend its cheaper, on-demand payment to more institutions. Notably, Ripple strives for regulatory compliance meaning its international partners can move funds without necessarily having fiat reserves.
The only problem thus far is the ambiguity around XRP and whether it is a security or a utility. If the latter is true then it’s only a matter of time before payment processors like Ramessa Online adopt xRapid as XRP soar. That said, Binance will need fiat options as the exchange is only crypto-to-crypto at the moment. This is a change the exchange will make through Binance Jersey.
Michael Arrington take on xRapid
There few people more upbeat about this development than Michael Arrington. He is a partner at Arrington Capital and former editor-in-chief at Tech Crunch. The serial entrepreneur has created one of the largest crypto hedge funds denominated in XRP. Even though Ripple is not officially involved in the fund, this is a development they certainly approve of.
Arrington touts XRP as a way to effectively reduce tribalism in crypto space. This is because cryptocurrency should not be limited to coin communities. Moreover, the extreme distrust for centralized institutions is something XRP advocates like Arrington are dismayed with. This is because to them, crypto is above all else a technology that developers can use to improve services in all sectors. XRP is, in fact, doing more to bring crypto closer to people than most other cryptocurrencies ever could.
As such, Arrington reacted with excitement to the news of the Binance–xRapid partnership. This will improve fortunes for XRP and allow more people interested in cryptocurrency to experience the utility solution.