XRP – The Future of Cross Border Payments and how Will Blockchain Revolutionize the Global Financial System?

The science of today is the technology of tomorrow.

The one thing that’s missing, but that will soon be developed, is a reliable e-cash, a method whereby on the internet you can transfer funds from A to B, without A knowing B or B knowing A.

Nobel Prize winning economist Milton Friedman


The business and market of cryptocurrency from its inception has been fluctuating and unpredictable, even more so in the just concluded year that recorded a very positive leap for the cryptocurrency market. This unpredictability lacks a particular pattern of fluctuation, thanks to its fledging phase where most investors are still grappling with trying to understand the workings of the market, thereby, causing the cost of purchase to be unstable as well as susceptible to doctoring.

Read David Schwartz's answer to Why are cryptocurrencies so volatile? on Quora

Presently, cryptocurrency transactions, and by extension, current prices available are dictated by cryptocurrency big-shots who have cornered a very sizeable chunk of the crypto market. This might inevitably remain so until corporate entities weigh in into the market and automate the prices. However, on the positive end, these big-shots are soon going to be deflated, considering the new influx of large scale financial investment being invested into the cryptocurrency market. The George Soro’s Investment Fund is a perfect example.

Notice must be taken that manipulation of prices won’t disappear, but with these new influx, there would be equal opportunities where volumes and price levels will soar higher than its current stage and where manipulation in this more equitable field would also be on another scale.


The current big shots in the crypto market contributed immensely to the fall in the crypto markets since they are culpable of the ignition and support that culminated in the grand negative turn of events, through their control of conventional media channels, social media crypto advert bans, Google Trend Reports, coordinated governmental regulations, threats and many more.

As in any asset class, large individual holders and large institutional holders can and do collude to manipulate price…In cryptocurrency, such manipulation is extreme because of the youth of these markets and the speculative nature of the assets.

Ari Paul, co-founder of BlockTower Capital
However, this drop has aided the formation for points of entry for corporate institutions, old rich bags, as well as big-time investors into cryptocurrency market.

Leaving the crypto-world and veering into the larger world, we can observe that traditional markets are undergoing huge stresses from pressures in politics, economics, bonds and stock market, currency markets, precious metals and many more. Also, governments in various countries of the world are promulgating measures of removing large denominations notes in the bid of countering laundering of and black marketing.

But given how infrequently the average US citizen professes to come into contact with a $100 bill, it is safe to assume the majority of these notes are feeding into a vast underground economy. From tax evasion to terrorism, the anonymity of paper money allows a global, cash-based black market to thrive.

World Finance

The tenuousness of the system of currency known as the fiat financial system has become more obvious, especially in the United States which is avoiding increasing its debt. Hence, the repositioning of wealth from the dying fiat currency pattern and over-inflated stock markets to traditional means of saving has begun. On a grand scale, cryptocurrency market will subsequently be regarded as a huge receiver of this wealth repositioning, with certain tokens getting the most benefits from this shift of wealth, for example, the XRP.

More broadly, the rise of crypto assets and wider adoption of distributed ledger technologies may point to a shift from an account-based payment system to one that is value or token based.

International Monetary Fund: Monetary Policy, June 2018

Unfortunately, the fight against fiat currency will take its adverse toll on the man on the street as many will begin resisting cash as they get away from the quick depreciation of fiat currencies resulting from hyper-inflation which, in the nearest time to come, will be attributed to trade wars that are currently going on between the United States and China.


The concept of benefitting from low-hanging fruits with the cash remittance industry has been treated by David Schwartz. This system will create a platform where XRPs will be adopted worldwide, and also prepare modalities for the growth of xRapid.

Cash remittance platforms such as Moneygram and Western Union are also part of the next stage of the xRapid plan. The viability of third-party providers can therefore come to fore when this milestone has been completed.

Ripple likely won’t target the biggest corridors like USD->EUR early because they’re already efficient. Early targets will be inefficient, but fairly high volume, corridor. For example, EUR->INR. Market makers (currency traders) often have very small profit margins, so even a small incentive to place good EUR<->XRP and XRP<->INR offers can beat what banks are getting now through the correspondent banking system.
Once we get one corridor, we hang other countries off each end of the corridor, expanding the reach of XRP.

David Schwartz, CTO at Ripple,

The entire movement can therefore be seen as a multi-phased journey that includes getting the leading brands in the cash remittance industry, heightening the use of XRP, improve XRP liquidity provision structures and mechanisms, get liquidity providers on board and many more plans that would unfold eventually.


Price determinants on crypto exchanges are countless. However, apart from unstable prices that seem illusionary, it is preferable to divert attention over to actual value of actions conducted by the Ripple , as well as positives that are created from it. XRPs cost in the future will be determined by all of the good value that is being created by the activities of the Ripple Team.

The growth in value of the XRP should be seen from its real adoption and utilization and even as the strength of the XRP in its various uses-cases can be confirmed by its believers, it is pertinent to prevent its hype from creating price surges that cannot be controlled because hype lacks sustainability, therefore, any form of growth as a result of hype would not create a stable price pattern for the XRP.

Credit: bitcoinexchangeguide

Also, the XRP unit value needs to be widely higher than its current value in order to allow global, cross country money transfer to be functional. In a couple of months, the surge in the use of XRP from the adoption of xRapid and the birth of liquidity pools would usher in the stage for this to happen. In the end, from discovery through research, it has become evident that XRPs’ cost will indicate its utility value.

It is necessary to clarify that the XRPs do not represent shares in Ripple. They are merely tokens designed independently and given to the Ripple Laboratory, therefore, Ripple’s survival is not linked to XRP tokens’ survival.

Ripple didn’t create XRP. The company that became Ripple was gifted XRP from the people who created it. Ripple is building a regulatory compliant payment system that can settle cross-currency payments using XRP. Whether and how that will affect the price of XRP is unknowable.— David Schwartz (@JoelKatz) July 3, 2018

Although Ripple stands a chance of growing the adoption pace of the XRP because of the strength and technological opportunities inherent in XRPs. However, Ripples does not totally depend on the XRP’s survival.

Credit: Ripple

In the same vein, the XRP can thrive without Ripple. As the Ripple ecosystem grows and accommodates more third-party developers to create applications and more tokens, the mutually beneficial relationship created increases the value propositions of all the constituents.

XRP doesn’t give its owners shares in Ripple, the XRP Ledger is decentralised among 150 plus independent validators – Ripple operates only 14 of them – and XRP would continue to exist even if Ripple disappeared tomorrow


Prices soar when negative feelings are at it maximum and people have disposed off their holdings at the height of the panic. This situation ensures transfer of holdings to market movers who mostly profit from the price increments.


Advancements digitally has become very pervading to a point where it has altered our interaction methods. If you take a close look, you will observe that from commercial activities to government services, almost every aspect of our everyday life has been affected by life changing technologies. As these technological advancements grow in scale and sophistication, they also succeed in creating new sets of cities and consumers, built to meeting evolving demands for quick services at the cheapest cost. And as much as the evolution seem exciting, the digital wave that is taking over the world also comes with grave challenges, even testing very complex, digitally advanced economies.

The blockchain is the financial challenge of our time. It is going to change the way that our financial world operates.

Blythe Masters

These days, organizational survival rely is dependent on the company’s capacity to outdo its competition in the marketplace by pulling ideas in, as well as pooling talents and capital to fortify positions and taking control of the competition. Organizations employed changes brought about by digitalization and challenged proven business models to reconsider incumbent value chains. The few ones that saw the light of day did so because they attained a level of efficiency that the manual and conventional counterparts had challenges replicating.


” The Internet of Everything needs a Ledger of Everything “
Harvard Business Review

Credit: Virtusa

Financials systems are being disrupted by Blockchain, a direct, efficient and secure environment of transaction and exchange of full range financial instruments such as stocks, bonds, cash, wages, benefits and airline miles. It is also used to facilitate safe transaction of legal instruments such as identity proof, compensation services, as well as other organizational values such as networks of service agreement.

According to the World Federation of Exchanges database, the total value of stocks traded globally is around USD 77.5 Trillion,1 and the market is getting bigger and more complex by the day. With transaction time and operational costs being a top concern, major stock exchanges are exploring blockchain for its potential to allow almost immediate settlements and automate compliance through smart contracts, with greater levels of security and transparency.


While blockchain currently brings to mind Bitcoin, blockchain possesses superlative applications which boosts transactions performance, reduces costs and removes any need for legacy systems like the financial clearing houses. However, the most important feature of the technology is its capacity for improving safety and security for surging online transactions occurring across regions, one that is bound to increase as smart cities grow and develop.

The examples below offer a small opening into the ways blockchain offer help to governments in their bid for smart financial system security.

  • Capital Market Opportunity: There is an estimation that five years from now, revenues in the capital market will grow by 12%, growing to $661 billion from $593 billion in the year 2015, while the asset base of buy-side entities is estimated to get to about $100 trillion by 2020, growing from an estimated $74 trillion in assets under management in 2014. The buy-side will produce almost $300 billion in fees by 2020 if this happens, therefore, constituting 45% of the total capital market revenue pool, that is on the assumption that market conditions are favorable and with the current fee structures. However, on the sell side, investment banks are expected to generate $205 billion by 2020, a decline of 31% of the total revenue pool which stood at 53% in 2006.
  • Smart Finance Loans: With blockchain, one can make a loan application from a commercial bank through issuing a smart contract that indicates ones personal details which can be collected and verified through via blockchain. The financial institution can then make the funds transfer having confirmed the contract. The smart contract can be used to monitor all transactions ensuring the loan achieves its purpose as the lender would get notifications of all purchases. Any violation of the loan terms will lead to seizure and forfeiture of property captured.
  • Trouncing Identity Theft: Withthe growth of web banking services and the influx of more people into e-commerce and other online activities that require revealing personal banking details, identity theft connected to a range of financial payments has been serious challenge. But the blockchain platform has come to save the day through linking online business interactions to a shared ledger, it can validate and track each transaction while monitoring, stopping and reporting and fraudulent action.
  • Smart Grant Financing: Before funds are granted to a student or researchers, there are certain criteria that the applicant needs to possess before making application, therefore, the lender usually offers some contracts on mutual agreement that requirements must be met. So, with blockchain’s assistance, prior the disbursement of funds, the loan contract will be mined, validated and replicated through the network and a decline of loan will be activated if the requirements are not met. Therefore, blockchain also aids effective provision of loans.


The value of Blockchain technology can be seen in value put on data. Data shares similar treatment as currency in economies that are digital, just like a fiat currency. For clarity purpose, a fiat currency is one backed and recognized by a country’s government, but is not backed by physical commodity.

When data is collected, analyzed and effectively used, it can develop all walks of daily life. And without it, progress will be non-existent. To be specific therefore, the value of data relies solely in the information and insight that can be gotten from it- and in most cases, it is important to add that the value usually surpasses financial quantification. This can be proven from the Google brand and business model.

From its beginning, Google’s services were given to consumers free of charge. This is because the organization’s decision makers recognized that the data they were collecting was more valuable than any financial benefit that would accrue from charging fees to its users.

In this new dispensation, the blockchain platform has become a necessity in achieving goals of turning data to currency and maximizing its value. This new dispensation now requires both individuals and organizations- private and public- to put their data forth, whether free or in a barter arrangement for data from other providers. Blockchain technology has the capacity to block out security challenges noted by organizations to create excuses for their refusal for revealing information, while encouraging adoption of data-sharing benefits as well as also growing a community-based ecosystem which will dictate the priority in terms of value which will be placed on data in the future.


From the foregoing, there are now evidences which allude to the possibility of Blockchain technology possessing capacity to completely alter how our society struggles with records maintenance and updating. This new innovation has successfully established its presence by creating a row in the financial market. The new challenge now is letting the various markets discover how to efficiently and effectively apply this technology while also ensuring consumers’ security and safety.

Nobel Prize winning economist Milton Friedman envisaged a future where electronic money would be used to make transactions between anonymous parties online.

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