December 13, 2018
How Ripple is Disrupting the social and political landscape of global payments
Ripple has emerged as the payment platform of choice for moving money across the globe
The rise of coins and tokens in today’s world has led to a new world of possibilities. Besides the financial sector, blockchain technology is disrupting several other industries. Several highlights on the social and political implications of the game-changing Ripple cryptocurrency is worth looking at.
To begin with, some commonly used terms when talking of Ripple, and their meanings are as follows.
- Ripple (cryptocurrency) – a real-time gross settlement, decentralized, online currency exchange technology and a digital payment network among financial institutions and organizations.
- Gateway – A credit intermediary responsible for receiving and sending respective currencies to destined public addresses via the Ripple net.
- Settlement risk – the capability of a financial transaction to go through or fail.
- xRapid – banks transfer platform on Ripple
Any establishment with few or no social implications is highly likely to go on a downward trend. Through Ripple for Good initiative, a social impact program whose goal is to support organizations and initiatives with a mission, an impact is recognizable .
This initiative also supports education and financial literacy since they are vital in the leveraging of the global digital economy. Ripple has so far donated more than $80 million to spur education in universities through research and innovation. Back in June, Ripple launched the University Blockchain Research Initiative (UBRI).
Part of Ripple’s commitment, is collaborating with universities aiming to dig more into the social impacts of cryptocurrency. The company’s commitment towards promoting education and equity is shown by their support for public school teachers via DonorsChoose.org. RippleWorks is also a non-profit organization and a Ripple partner that has done marvelous work in supporting social ventures spanning several sectors.
Additionally, Ripple’s goals and dreams are beyond imagination. Besides securing, speeding and reducing the costs for remittances and microtransactions, the company aims at providing microloans and financial aid for small and medium-sized enterprises; mostly targeting women who are often disadvantaged by their nature of being women in society – being viewed as lesser individuals.
In a report published by the UK government (Department of statistics) in May 2018, approximately 1.25 million nationals were non-residents. Another example is Japan, 1.28 million foreigners were working there in the year 2017. The majority of these workers play a primary role in their family’s source of income.
The rising wave of migrant workers in developed economies spurs enormous amounts of cash transfers. Workers have been experiencing a lot of issues when transferring cash to their countries. XRP makes it a lot cheaper and faster to send money across the globe.
Some of the challenges experienced range from time-consuming transactions and high transfer costs to delays with the system. Ripple XRP provides an ultimate remittance corridor from the workers country to their home country. Apart from the speed of the financial transactions, Ripple is also reliable and efficient. Families back home are thus saved considerable frustration. Thanks to Ripple for the PayChan feature which has resulted in improved livelihoods of families depending on income from their counterparts working abroad. A good example is the partnership between Siam Commercial Bank and SBI Remit which has seen Thai workers in Japan access real-time remittance payments.
Through Ripple Net’s messenger API, workers and their families have visibility into a transaction and thus know the rates, fees and delivery time. Moreover, the fast speed and low costs have resulted in increased customer bank loyalty.
The fastest selling point of Ripple and its products is its out-of-the-box architecture of connecting banks across the world. Some of the major banks that have partnered with Ripple include Itau Unibanco of Brazil, Beetech of Brazil, Zip Remit of Canada, LianLian International of China, and SBI among others.
The rising adoption of Ripple has impacted the most sensitive aspects of the global economy. This ensures many issues are raised from the interaction of the banks online. When transactions are cheaper, business booms and the community gets significant benefits.
Ripple is the third largest cryptocurrency in the world and also the most popular cryptocurrency in Asia. It will have a significant impact in Asian countries like Singapore and Russia before expanding to other countries.
Additionally, countries with economies hard hit by global factors such as inflation have had a massive uptake of the Ripple cryptocurrency. For instance, in a country like Zimbabwe, XRP is in demand throughout the nation as it tries to get back its economic prowess.
On the other hand, regulatory issues are a significant factor for Ripple. For example, after the introduction of regulatory measures in the Middle East and Asia-Pacific countries, rates rose significantly. Furthermore, Ripple, and other cryptocurrencies on the market, could ultimately land you to jail in some countries such Bangladesh where crypto-related activities are illegal. This, in turn, puts pressure on the Ripple market.
Through xRapid, Ripple provides countries with a better alternative when sending money over international borders compared to traditional means. The largest payment network allows faster settlements of ledgers and connects financial institutions around the world. This effect enables trade between two countries to be lower down and more efficient.
A robust platform is needed to bring together the world’s online population of 3 billion. Since the introduction of Ripple by Ripple Labs in 2012, the team has done a lot of work to make that possible. It is scalable, secure and can to be embedded in banking software.
Additionally, it integrates with other blockchain technologies and fiat currencies. For this reason, Ripple touches a vast majority of industries across the globe. Summarily, Ripple offers a store of value. They have ideally placed 55 billion XRP in an escrow account for future use. 20% of the XRP created was retained by the creators and the remaining portion was issued to Ripple Labs for sale. This is in line with Ripples technology as a financial plank for the Internet of Value.
Gb Adolph Obasogie is a Chartered Accountant, and he worked for several years as an Independent Consultant for World Bank projects in emerging markets. As an Emerging Markets Analyst, he has analyzed several portfolios for clients in the Middle East, North America, Europe, and Africa. He has a deep understanding and insight on the workings of Cryptocurrencies and their real-world applications. You can connect with him on Linkedin.