Ripple, which has a total valuation of over $ 10 billion, is also known as the company behind the XRP cryptocurrency. The link between Ripple and XRP is quite complex. Ripple has also filed multiple lawsuits in this regard, and there is now a risk of XRP being declared a security. Ripple’s CEO stated that the uncertainty created by this situation caused the company to lose serious customers.
“We are losing customers because of XRP”
In an interview with Julia Chatterley, Brad Garlinghouse actually made a statement that attracted the reaction of XRP investors. Chatterley asked the famous CEO if the bond with the XRP cryptocurrency had a negative impact on Ripple. Garlinghouse stated that some potential investors actually decided to wait because of XRP.
“Often times, when I talk to customers and tell them about the product that uses XRP in their checkout flow, they ask me about regulatory developments. We had customers who answered us, “We will wait until a clear framework is formed on regulation.”
Garlinghouse recently stated in a podcast that a company he does not want to be named does not want to use On-Demand-Liquidity (ODL) just because of XRP:
“Yesterday, I was on the phone with the CEO of a financial services company. He told me, “We want to work with you, but we can’t use Ripple’s On-Demand-Liquidity product.”
ODL product, the backbone of XRP volume
ODL is known as a payment platform that uses XRP cryptocurrency as a bridge asset. The product, previously known as xRapid, uses XRP and fiat money for cross-border transfers. The transfers of institutions that want to send money from country A to country B are converted from the fiat money of country A to XRP. Subsequently, XRP funds are sent to the crypto currency exchange and intermediary associated with country B and converted into the fiat currency of that country.
The transfer process, on the other hand, can be completed during the day, although it will take weeks, or months, thanks to XRP. The transaction fee is also much lower compared to SWIFT and its equivalents. However, uncertainty about XRP is definitely a big problem for both individual and institutional investors. The conclusion of the case that is still ongoing in the USA may end – for good or bad – this uncertainty for Ripple.
The IMF’s recent announcement that it sees XRP, BTC and ETH as “unofficial currencies” may reduce the security uncertainty.