It has been quite the year for XRP (CRYPTO: XRP). The token hit a five-year high of over $3.50 in July as optimism surged about the end of the long legal battle that its developer, Ripple Labs, had been engaged in with the Securities and Exchange Commission, among other things. However, since then, the crypto’s price has trended downwards.
XRP acts as a financial bridge and is the native asset of the XRP Ledger. It excels in making cross-border international payments easier. Let’s say a U.S. company wants to pay a supplier in Europe. Rather than converting dollars into euros, it might put the dollars into XRP and then transfer the crypto to the supplier’s wallet. The recipient could then convert that XRP into their own currency.
XRP plays a key role in Ripple Lab’s operations. But that role may diminish if the business shifts its focus. That and other headwinds might make it difficult for XRP to regain its summer highs.
1. Ripple’s CTO is stepping down
On Sept. 30, Ripple Chief Technology Officer David Schwartz announced that he would step away from his day-to-day duties with the company by the end of the year. Schwartz has been involved with XRP for 13 years and was one of the architects of the XRP Ledger, its underlying blockchain.
While he will join the board of directors and stay involved as CTO emeritus, his departure will leave a void. Schwartz is a respected voice in the cryptocurrency world, and he has played an important role in the evolution of XRP. Ripple has not yet announced who will replace him.
2. SWIFT is adopting blockchain technology
SWIFT is the dominant global payment messaging cooperative, comprised of 11,500 banks and institutions in over 220 countries. If you transfer money internationally, your bank probably uses the SWIFT network to do it. However, that process can be slow and relatively expensive, which makes SWIFT ripe for disruption.
Indeed, earlier this year, Ripple CEO Brad Garlinghouse predicted that XRP would take about 14% of SWIFT’s market share by 2030. Sounds great, right? Not so fast.
The challenge for XRP and many other crypto projects is that established players in the finance space won’t just sit back and wait for blockchain upstarts to dethrone them. They’re looking for ways to integrate blockchain into their operations, particularly now that some of the regulatory roadblocks have been removed.
