XRP is the third-largest cryptocurrency by market cap and has the potential to disrupt international payments.
The crypto sector has been hot this year, as President Donald Trump has made it a priority to make the U.S. the crypto capital of the world. Among other things, the Trump administration plans to establish a strategic U.S. Bitcoin reserve and signed executive orders designed to make it easier for people to invest in crypto in their retirement portfolios.
Two of the more popular cryptocurrencies are XRP (CRYPTO: XRP), the third-largest cryptocurrency by market cap, and the meme token Dogecoin (CRYPTO: DOGE), the eighth largest (as of Sept. 12). Which is more likely to be a millionaire maker?
Most cryptocurrencies are evaluated based on the technological capabilities of their networks and the potential to apply those to real-world use cases. XRP’s network was structured to disrupt international payments by helping traditional financial institutions and individuals move money more efficiently.
XRP has the potential to process 1,500 transactions per second (TPS). True, other crypto networks can process much more, but XRP was created by the company Ripple with a specific purpose in mind.
Ripple is attempting to bridge the gap between the crypto world and mainstream finance by offering capabilities including instant payments, stablecoins, and custody solutions. The company already has many traditional bank customers. Ripple has also acquired a large prime broker called Hidden Road and launched its own stablecoin called RLUSD, for which XRP can be used as a bridge token.
Ultimately, Ripple’s Chief Executive Officer Brad Garlinghouse thinks XRP has the potential to steal volume from SWIFT, the Society of Worldwide Interbank Financial Telecommunication, a messaging system that allows banks globally to send payment instructions to one another. The big differentiator, according to Garlinghouse, is that the SWIFT system requires banks to prefund accounts in multiple countries and hold reserves. Ripple instead uses XRP to allow real-time liquidity and complete transactions in seconds at minimal cost, so banks don’t need to necessarily hold reserves, which frees up capital and enhances liquidity.
Another catalyst would be the launch of a U.S. XRP spot exchange-traded fund (ETF), pending approval by the Securities and Exchange Commission (SEC). Although this is taking longer than some expected, betting markets still anticipate that approval is likely to happen this year.
