While altcoins like Ethereum and Litecoin are rallying to new highs, popular cryptocurrency Ripple doesn’t wish to be left out in the process and hence joining the crypto party, the altcoin has surged by nearly 100% in past 24-hours from the press time. Currently, according to CoinMarketCap, Ripple is trading to its new all-time high of $0.86 with its market cap climbing above $30 billion and the trading volumes moving above $5 billion. This makes Rippe now the third largest cryptocurrency by market cap, after Bitcoin and Ethereum.
Ripple (XRP) is the token behind a new blockchain-based project which aims to displace the SWIFT banking system used for international transactions. The project looks forward to bring distributed ledger technologies into the mainstream. The exiting SWIFT banking system takes a few days for the money to reach the intended destination. Ripple aims to reduce this time-period to less than a day while also cutting the transaction costs by over 30%.
One of the major reasons that could have triggered this rally is the news that broke earlier this week about banks in South Korea and Japan going to test cross-border payments using Ripple-based systems. However, note that XRP tokens themselves will not be used in the transaction. Also, another reason could be that a mobile app payment powered by ripple is scheduled to be demonstrated live in just a few hours from now on Japan’s “Nikkei Morning Plus” TV show at 5 p.m. ET (7 a.m. Friday local time).
Also, earlier this week, Ripple reported through its official blog that it will be putting $55 billion of the cryptocurrency in escrow funds and create supply predictability of XRP tokens. This move has been taken to instill confidence within Ripple investors towards the cryptocurrency.
Below is the complete explanation provided by Ripple of working of escrow:
“The Escrow feature in the XRP Ledger allows parties to secure XRP for an allotted amount of time or until specific conditions are met. For example, Escrow allows a sender of XRP to put conditions on exactly when a payment can be completed, so the payment remains cryptographically locked until the due date.
We use Escrow to establish 55 contracts of 1 billion XRP each that will expire on the first day of every month from months 0 to 54. As each contract expires, the XRP will become available for Ripple’s use. You can expect us to continue to use XRP for incentives to market makers who offer tighter spreads for payments and selling XRP to institutional investors.
We’ll then return whatever is unused at the end of each month to the back of the escrow rotation. For example, if 500M XRP remains unspent at the end of the first month, those 500M XRP will be placed into a new escrow account set to expire in month 55. For comparison, Ripple has sold on average 300M XRP per month for the past 18 months.”
Apart from this, Ripple is also said to have signed a deal with Santander Bank and American Express to send international payments on its blockchain.