Ripple Debuts XRP-Based Cryptocurrency Product for International Payments

October 1, 2018, 8:26 PM UTC

A cryptocurrency whose regulatory fate remains uncertain is ready for prime time.

Ripple on Monday debuted a new financial product based on XRP, the world’s third-most valuable cryptocurrency by market capitalization next to Bitcoin and Ethereum. The service, called “XRapid,” is designed to enable financial firms and other organizations to make quicker and cheaper international payments.

The product launch comes at a time when the legal status of XRP hangs in limbo. Unlike Ethereum, which members of the U.S. Securities and Exchange Commission in June indicated does not qualify as a security under U.S. securities law, XRP’s classification remains an open question.

Brad Garlinghouse, Ripple’s CEO, was abuzz about the launch of XRapid at his company’s Swell event in San Francisco on Monday. “The industry needs to mature and be less dependent on speculative trading and more dependent on solving real problems for real customers,” he told Fortune.

“We’ve been talking about how Ripple intends to do that and now we have more and more proof in the pudding,” Garlinghouse added. “It’s a big deal for Ripple, it’s a big deal for the XRP community, and it’s big deal for crypto.”

Ripple has signed on three financial firms as customers for the XRP-based product. They are MercuryFX, a payment provider based in the UK; Cuallix, a money transferring company with operations in the U.S., Mexico, and Hong Kong; and Catalyst Corporate Federal Credit Union, a financial firm that serves more than 1,400 credit unions across the U.S.

Alistair Constance, CEO of MercuryFX, told Fortune that he was persuaded to join XRapid’s earliest set of customers after running two trials of the product over the past couple of years. The pilots involved sending a several thousand dollars in small denominations to a charity in Mexico.

Constance said that to send $1,000 via the status quo method, represented by the SWIFT international payments network, this would take 2-to-3 days to settle and cost somewhere between $40 to $75 on average. With XRapid, MercuryFX was able to make payments in two minutes at a cost of “not even a couple cents,” he said.

“The economics speak for themselves,” Constance said.

If regulators deem XRP to be a security, the ruling could hinder the cryptocurrency’s adoption and lead to penalties for firms involved in selling it. Ripple, formerly known as OpenCoin, the creator of XRP, has billions of dollars worth of XRP locked away in escrow which it sells on a regular basis to fund its operations as well as other initiatives, such as a recent $100 million donation to a corporate social responsibility program.