XRP vs Libra: Which Blockchain Will Replace the Banking System? – Ripple, the company behind the XRP tokens, and Facebook, the company behind the upcoming Libra token, both are competing to dominate the cross-border payment sector.
While the two companies are struggling to dominate this sector, it is important to note that they must defeat existing cross-border service providers, one of which is Visa.
Visa has a clean track record in the cross-border shipping sector. This is one of the most popular platforms for sending money from one place to another and offering various financial services in addition to remittances. Then, how will XRP and Libra compete with Visa?
While blockchain technology has many use cases, one of the most common use cases of blockchain technology is in the financial sector.
Cryptocurrency is a popular choice for digital payments with a special focus on international money transfers. When sending money across borders, cryptocurrency is known to be faster, cheaper, and more efficient than traditional methods.
Although there are many cryptocurrency that can be used for this purpose, XRP is specifically made for it as one of the main tools in the Ripple network.
According to the World Bank, more than $ 529 billion is sent to low and middle income countries by 2018. This is around 10% higher than that sent in 2017 and the number will continue to grow over time.
Most of the cash is sent to Africa, Sahara and Southeast Asia. Cryptocurrency can play a key role in sending money because they are not only faster but also cheaper.
According to the World Bank, traditional cross-border remittance service providers charge an average of $ 14 to send $ 200. Using cryptocurrency like XRP, you might not need to spend up to $ 1 for a similar transaction!
Ripple is ready to take over the international payment sector. With XRP as the third largest cryptocurrency based on market capitalization and with other blockchain-based technologies such as xRapid, xCurrent and xVia, many believe that it is only a matter of time until Ripple can dominate the international payment sector.
Then, Facebook has also released a white paper for its cryptocurrency, Libra. This causes a mixed reaction in the cryptocurrency space. Some people believe that Facebook will be the end of Ripple. However, both Facebook and Ripple, both of them still don’t have enough adoption to overtake Visa, SWIFT, PayPal and other leaders in the financial world today.
It is true that blockchain based systems provide the perfect technology to accelerate cross-border shipments and reduce costs. However, it is important to note that financial institutions will not give up without resistance.
JPMorgan CEO Jason Demon recently said that cryptocurrency poses no threat to traditional financial institutions. Jason said:
“We move $ 6 trillion a day across the world. It’s very cheap, very safe, and works. And the banking system has built Zelle, real-time P2P, and TCH, a clearing institution, with a banking system that builds real-time payments. We already have all that. ”
Even so, Jason also admitted that the blockchain-based startup was trying to overthrow the bank, he noted that the chances of this happening were very small.
So, Ripple and Facebook still have a lot of work to do if they want to dominate the traditional financial sector. Let’s wait.