Just one – before this month, that’s how many financial firms had publicly expressed interest in using Ripple’s cryptocurrency, XRP.
Indeed, the blockchain startup has no lack of partners, from American Express to SEB, that use its xCurrent product, which allows financial institutions to send transactions in real-time without the innovative new crypto-asset. But it was only a little-known company (Mexico-based Cuallix) that had signed on to use Ripple’s xRapid to leverage XRP for liquidity.
Flash forward to today, however, and the narrative has seen a shift.
In rapid-fire succession, three money transfer firms revealed they are piloting the use of XRP. First was remittance giant MoneyGram, then came Mercury FX (which conducts about $500 million in transaction volume per year) and finally telecom provider IDT.
To many, the news has been a vindication – not just for Ripple, but for the millions of mainstream investors that have embraced XRP as an alternative investment, helping it rise from mere cents early last year to nearly $4 this month.
And while it’s still an open question as to whether such tests will go live, during the Blockchain Connect conference in San Francisco last week, Ripple CEO Brad Garlinghouse framed the general skepticism as old-fashioned and out of touch.
Garlinghouse told attendees:
“When I hear banks say, ‘We’re not going to use digital assets,’ I hear Randal Stevens say ‘AT&T will never use IP.'”
Internal only
So far, the largest interested party in XRP is legacy money transmitter MoneyGram, which in addition to being valued at $700 million, has over 350,000 locations around the world at which customers can pick up cash.
However, the pilot does not directly serve any of those locations, according to a spokeswoman.
Instead, the pilot is focused on implementing XRP within Moneygram’s internal corporate treasury transactions. In an email, she described an internal pilot for back-office functionality only.
“MoneyGram is not using XRP in customer transactions,” the spokeswoman told CoinDesk.
That might seem a bit strange, since a whopping 89 percent of Moneygram’s revenue in 2016 was generated from its money transfer service, according to the company’s most recent annual report, and XRP (and other cryptocurrencies) are widely targeted at cross-border money movement.
But while those potential XRP use cases aren’t being tested yet within MoneyGram, Holmes said what the company learns from the internal pilot could someday inform much broader applications.
The spokeswoman said:
“The goal is to investigate whether it is efficient in terms of time and cost and to see if it can be a viable addition to our FX trading.”
Consumer-facing
Perhaps more notably, London-based Mercury FX’s interest in XRP is geared towards consumer-facing applications.
“I imagine we will be able to begin using XRP for customer payments in the coming months,” the founder and director of Mercury FX, Alastair Constance, told CoinDesk.
He continued, saying, “As with all things, we will start with more modest sums in the thousands of dollars and increase by orders of magnitude from there. Come to the end of the pilot we will not be surprised if XRP is carrying single transactions across the blockchain of a million dollars or more.”
By far the most detailed pilot, the Mercury FX project will use xRapid to conduct payments for goods and services in China and Mexico, with the hope that it will expand to other emerging markets via partnerships with Ripple and other platforms.
While the software for the pilot is currently being integrated with Mercury FX, Constance said the pilot won’t likely formally begin for two more months, before concluding about three months after that.
Not all of Mercury FX’s nearly $500 million in annual transaction volume will be conducted with XRP anytime soon, though, as Constance said he’s also exploring using some of Ripple’s other blockchain products that don’t require XRP.
“Crypto is building into crypto from one side and fiat needs to build from the other side,” he said. “Ripple lets fiat companies like us do that.”
Use unknown
While XRP dropped from its nearly $4 highs, it’s held relatively stable between $1 and $1.50.
Yet, it’ll be interesting to see how news of new pilots and interest affect the price of the cryptocurrency, especially if new details about Cuallix’s work and IDT’s pilot are revealed.
IDT declined to comment for this report, other than to point to its existing statements, where Alfredo O’Hagan, SVP of IDT’s consumer payments business said, “We’re excited to pilot Ripple’s xRapid solution for on-demand liquidity. We expect that xRapid will enable us to settle more transactions in real-time and at a lower cost.”
Cuallix did not respond to inquiries before press time.
Of note also though, is another, newer use case for XRP – as venture capital.
Last week, online marketplace Omni revealed it had accepted a venture investment largely in XRP, which it plans to use in part to pay the bills — such as paying freelancers.
With all these new projects implementing XRP into the plan, no one is possibly more relieved than Ripple executives themselves, who had known of the interest, but had largely been unable to share it with the public.
Ripple’s head of product, Asheesh Birla told CoinDesk:
“We’re pleased to be able to share how payment providers are implementing xRapid to improve their payments flows. Remember, we just built and launched xRapid late last summer. This is just the beginning.”
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple.
Bailey Reutzel contributed to this report
Correction: This text has been modified to accurately reflect that Moneygram is valued at $700 million
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