Today, Ripple’s University Blockchain Research Initiative (UBRI)—the leading university blockchain accelerator program—welcomes the University of Capetown, Reykjavik University, and New York University Abu Dhabi (NYU Abu Dhabi) to solve key challenges in financial technology and advance real-world solutions for blockchain and cryptocurrency. The three additions join more than 35 global university partners already deeply engaged in blockchain research and building new use cases for fintech.

Launched in 2018, UBRI is helping to move the blockchain industry forward by providing faculty and students with the technical tools and resources required to thrive as part of the next generation of tech talent. Innovation and technological advancements have traditionally stemmed from academia. By supporting new curriculum, research and technical problem solving, knowledge sharing, and convening, UBRI is leading the fintech workforce of the future.

For example, Yuliya Guseva of Rutgers Law School recently conducted research into global crypto enforcement, while Oxford’s Saïd Business School is launching a new Future of Finance and Technology Initiative for which UBRI will sponsor Ph.D. research into open banking and financial wellness innovation. To date, UBRI has grown to see more than 280 research projects and 161 new or modified courses across 18 countries. 

Today, the University of Cape Town, a leading research university in South Africa, joins Ripple’s UBRI as its first Africa-based partner, offering Masters and Ph.D. programs in financial technology. The University of Cape Town teaches core open-payment protocols and blockchain technologies as part of its “FinTech and Crypto” course, for which the university is collaborating with existing UBRI partners at the University of Oxford and MIT to develop a leading curriculum. 

Students at the University of Cape Town’s School of Economics will also focus their research on central bank digital currencies (CBDCs), delving into issues such as interoperability, financial inclusion and secure digital identity. Co-Pierre Georg, Associate Professor at the University of Cape Town and course convener for the MPhil in Financial Technology explains, “Central banks around the world are studying the use of distributed ledgers to overhaul their payments infrastructure, and nowhere is this more important than in Africa. With our large remittance sector and high cost of cash, this grant will help us accelerate our activities to create the necessary skills to ensure the innovativeness of our financial services sector.”

NYU Abu Dhabi—UBRI’s first partner in the UAE—will also join universities such as National University of Singapore, University College London, Stanford University and ETH Zurich, which are deploying research into CBDCs. Students in NYU Abu Dhabi’s Social Science division will explore new use cases for digital assets in courses such as, “FinTech Innovation: Finance, Technology, Regulation” and “Crypto Economics.” Ripple is also thrilled to be part of the Corporate Sprint Accelerator Program developed by startAD, the startup accelerator powered by Tamkeen and anchored at NYU Abu Dhabi. By joining the sprint accelerator, UBRI will steer fintech and blockchain startups from around the world to launch and grow into the UAE market through pilot projects with innovative corporations.

“Blockchain is the cornerstone of the digital transformation that will drive economic development in the decades to come. In fact, the global blockchain distributed ledger market size is projected to reach $137.29 billion by 2027, growing 62.7 percent from 2020 to 2027,” said Ramesh Jagannathan, Managing Director of startAD and also Vice Provost for Entrepreneurship at NYU Abu Dhabi. “NYU Abu Dhabi and startAD intend to be at the forefront of research and implementation of new technologies into real-world applications, spurred by visionary government initiatives and groundbreaking initiatives such as Ripple’s UBRI.”

UBRI enables schools like Reykjavik University to further accelerate academic research, technical development, and innovation in blockchain, cryptocurrency, fintech, and digital payments. Reykjavik’s UBRI funding and partnership will support the School of Technology’s research on new verticals and fintech applications using blockchain. “The relationship with Ripple UBRI will strengthen our efforts to experiment with the models and services that we have been researching in a practical setting using Ripple’s global network and professional platform. This is consistent with our goals of connecting our academic research with industry and practical settings,“ said Dr. Gisli Hjalmtysson, Dean of the School of Technology at Reykjavik University.

Reykjavik University will also work closely with Ripple’s Iceland entity, which serves as one of Ripple’s engineering hubs to foster technical talent in the region.

To learn more about Ripple’s UBRI and how its partners are developing new use cases with distributed ledger technology (DLT), tune in to All About Blockchain.

Today, Ripple is excited to announce two new appointments to its leadership team. Rosa “Rosie” Gumataotao Rios, 43rd Treasurer of the United States, joins the Ripple Board of Directors and Kristina Campbell joins as Chief Financial Officer. 

“These two exceptional leaders join Ripple at a pivotal time for the company,” said Brad Garlinghouse, CEO, Ripple. “Rosie’s experience in the public and private sectors provides an invaluable perspective to Ripple, especially during this time as the industry works to define crypto’s future. As well, adding Kristina’s extensive knowledge and success building teams and processes at rapidly accelerating businesses was a no-brainer. We are extremely fortunate to have them on the team as we continue our rapid international growth and to champion for regulatory clarity in the U.S.”

Rios brings 30 years of unparalleled experience and expertise in public policy and investment management to Ripple. Her career has focused on economic development, urban revitalization and real estate finance. As the 43rd Treasurer of the United States, she oversaw all currency and coin production activities with almost 4,000 employees and an annual budget of $5 billion. She also initiated the efforts to place a portrait of a woman on U.S. currency and received the Hamilton Award – the U.S. Treasury’s highest honor.

“I’ve dedicated my career to financial inclusion and empowerment, which requires bringing new and innovative solutions to staid processes. Ripple is one of the best examples of how to use cryptocurrency in a substantive and legitimate role to facilitate payments globally,” said Rios. “Blockchain and crypto will underpin our future global financial systems. Cryptocurrency is the what. Ripple is the how.”

Campbell will drive Ripple’s financial strategy, accelerate growth and deliver value to shareholders as business momentum continues to grow globally. Her strategic vision, combined with a focus on building fantastic teams and operational excellence, has resulted in significant successes for the businesses she’s worked with throughout her career. Previously, she was CFO at PayNearMe, where both the business and team grew substantially under her leadership. Prior to Ripple, she held several roles at GreenDot, a now $2.5B public fintech company, including GM of GoBank. 

“Cryptocurrency and blockchain technology allow us to rethink and improve the systems and infrastructure around how money moves. With this technology, we will make the global financial system accessible to all,” said Campbell. “Ripple is uniquely positioned to improve global payments in ways that have yet to be defined and I’m excited to be a part of that solution.”

Ripple publishes the quarterly XRP Markets Report to voluntarily provide transparency and regular updates on the company’s views on the state of crypto generally including the XRP market, such as quarterly sales updates, relevant XRP-related announcements and commentary on previous quarter market developments. 

As an XRP holder, Ripple believes proactive communication and transparency are part of being a responsible stakeholder. Moreover, Ripple urges others in the industry to follow its lead to build trust, foster open communication and raise the bar, industry-wide.

Executive Summary 

The first quarter of 2021 was an exceptionally strong period for crypto. Total crypto market capitalization ballooned from ~$800B to almost $2T in the span of three months, and institutional adoption was once again a key driver of this gain. Morgan Stanley and Goldman Sachs individually announced plans to include BTC as part of their wealth management offerings, while BlackRock began trading BTC futures. 

Over $3B worth of BTC ended up on the balance sheets of publicly traded corporations, which is roughly the value of all institutional purchases in 2020, and the industry saw a large-scale commercial use case when Tesla announced it began accepting BTC directly for payments. While there have been commercial uses of crypto including BitPay and Ripple’s On-Demand Liquidity solution for years, Tesla is one of the first examples of a large non-financial services player jumping into the industry. 

As more sophisticated participants began entering the space, markets also became more leveraged, evidenced by the growth of derivative markets. Open interest in BTC and ETH futures tripled in the first quarter in February, which saw open interest grow to $150M from 0 during the quarter. Open interest in XRP futures doubled from $250M to $500M. That number temporarily shot up to $2.1B in the first two weeks of Q2. 

The growth of leverage is further exemplified by the number of forced liquidations that occurred in Q1. Three separate events individually contributed to $1.5B in liquidations across derivative exchanges when BTC price fell by only 10%. To put that into perspective, the 50% BTC crash in March 2020 which was dubbed Black Thursday, led to a total of $1.4B in liquidations.

The State of U.S. Crypto Regulation 

As we have said from the very beginning, the SEC’s lawsuit against Ripple will have a profound impact on the crypto and fintech industry as a whole. A healthy market requires regulatory clarity and consistency, but the SEC’s current approach – regulation by enforcement – has caused havoc for U.S. XRP holders, developers, content providers and small businesses that use and rely on XRP and the XRP Ledger. The U.S. crypto industry needs a clear path forward and, as the lawsuit continues, we hope its outcome will provide some of the regulatory certainty that’s desperately needed for industry maturation and progress for all market participants in the U.S.

Key lawsuit updates since the previous report:

On April 22, the SEC filed a motion to strike Ripple’s Lack of Due Process and Fair Notice defense which states that the SEC had not adequately warned both Ripple and the broader market that XRP was considered an investment contract.On April 19, lawyer John Deaton filed a motion to intervene on behalf of more than 12,000 XRP holders (and others) claiming that the SEC does not represent – and is in fact hurting – their interests.On April 16, Ripple filed a motion seeking to stop the SEC from contacting foreign regulators and requesting discovery outside the rules of federal procedure and the Hague Convention in this matter. On April 6, Ripple’s motion to compel discovery was granted in large part by the Court. The SEC is required to produce documents regarding BTC, ETH and XRP.On March 19, Ripple prevailed in its lawsuit against Tetragon, a Ripple investor. The Judge said that since there has been no official determination regarding XRP’s status, Tetragon’s claim that a “securities default,” as defined in their investment documents, occurred is wrong. Ripple was also awarded $3.5M in attorneys’ fees and costs.

On-Demand Liquidity (ODL) Momentum Continues 

To meet growing demand for ODL, Ripple agreed to acquire 40% of Asia’s leading cross-border payments specialist, Tranglo. This partnership will help Ripple expand the reach of ODL to the APAC region, starting in Southeast Asia and supporting existing corridors such as the Philippines.

Disciplined, Responsible Stakeholders: Q1 Sales and Purchases 

Last quarter, total XRP sales by Ripple, net of purchases, were $150.34M (USD) vs. $76.27M the previous quarter. The increase in XRP sales can be attributed to deeper engagement from key ODL customers. For well over a year, Ripple has not sold programmatically.

Ripple continued to engage in sales to support ODL and key infrastructure partners as part of providing increased XRP liquidity to improve the ODL experience of certain customers, eliminating the need for pre-funding and enabling instant global payments. 

Total sales by Ripple, net of purchases, ended the quarter at 7 bps or 0.07% of global XRP volume according to CryptoCompare TopTier (CCTT) volumes. This is compared to total sales in the previous quarter of 5 bps according to CCTT. 

Sales Summary (dollars in millions)
Q4 2020
Q1 2021
Total ODL-related sales*
111.12
150.34
Total purchases
34.85
0.0
Sales (net of purchases)
76.27
150.34
Global XRP volume
Q4 2020
Q1 2021
ADV XRP (dollars in millions)
1,610.25
2,264.26
Total XRP volume (dollars in billions)**
148.15
203.78
Net sales as % of total volume
0.05%
0.07%

*ODL-related sales include leases, OTC and XRP sales to support ODL (including Line of Credit) and key infrastructure partners. 

**Note: Figures were compiled using the CryptoCompare API for daily TopTier aggregate volumes which reflects total XRP volume in dollars by exchanges that CryptoCompare lists in the TopTier. Ripple continues to evaluate its benchmarks given challenges, such as fake volume, that continue to persist in the industry.

Certain wallets that are being used for XRP sales also provide short-term leases to market makers. This is worth noting given they are often mischaracterized by market participants as sales. Leases are ultimately returned to Ripple. 

Reported Volume

CCTT’s reported daily volume for XRP increased significantly in Q1 2021 from Q4 2020. The average daily volume reported was $2.26B in Q1 vs. $1.61B in the previous quarter. Notably, XRP volumes posted four of the highest volume days ever recorded. 

Volatility 

XRP’s standard deviation of daily returns over Q1 was 9.0%, representing a decrease in volatility from Q4’s 9.6%. XRP’s volatility over the quarter was higher than that of BTC (3.4%) and ETH (4.4%).

Ripple’s Escrow 

In Q1 2021, three billion XRP were released out of escrow (one billion each month) in line with prior quarters, and the official escrow arrangement. In total, 2.7 billion XRP were returned and subsequently put into new escrow contracts throughout the quarter. For more information on the escrow process, see here. Note: All figures are reported based on transactions executed during the quarter.

There was a slight uptick of conversation around Ripple “flooding the market” last quarter, as many continue to misunderstand the mechanics of the escrow process which are simply transfers between Ripple treasury and escrow management accounts. In other words, those transfers do not equate to Ripple distributing XRP.

Ripple is committed to transparency as reflected by this quarterly markets report. As noted above, XRP sales and distributions (such as leases which are returned to Ripple) can be attributed to ODL. Ripple plays a responsible role in the liquidity process. Outside of Ripple, however, large XRP holders do exist as is the case with other major cryptocurrencies like BTC and ETH.

Accumulation 

Data indicates that Q1 2021 was a quarter of XRP accumulation. The number of “whale” wallets, defined as wallets with balances of at least 10M XRP, increased from 308 to 319. Similarly, the number of wallets holding between 1M and 10M XRP increased from 1,125 to 1,196. 

Similarly, ETH saw significant accumulation as well. The number of wallets holding at least 1,000 ETH increased from 1,178 to 1,253 during the quarter.

On-chain Metrics

Last quarter, the number of active XRPL wallets increased as on-ledger activity grew. In Q1, total on-ledger payment volume was $62.3B, representing a 23% increase quarter-on-quarter, while the number of total on-ledger wallet addresses increased 15% from 2.35M to 2.70M.  

XRP Integrations

Global XRP infrastructure saw significant development and innovation in Q1 and early Q2 including:

Bitrue, a cryptocurrency trading platform, added several XRP pairs and recorded significant growth as daily trading volumes increased by 400%. Additionally, Bitrue launched a FLR/XRP pair, trading IOUs of the Spark token which are set to be distributed in Q2.Independent Reserve, one of Australia’s largest crypto exchanges, launched XRP/SGD and XRP/USD trading pairs.Kucoin exchange added an XRP/USDC pair.The Multibank group launched MEXBIT, an exchange catering to institutional customers, to offer services for assets including XRP.Lykke relisted XRP citing the token’s capability to bridge the gap between blockchain and traditional finance. 

In addition, Wanchain and Huobi ECO Chain (HECO) built cross-chain bridges to the XRP Ledger, adding new integrations into DeFi. Separately, CoinShares, the largest crypto asset manager in Europe, launched an XRP exchange-traded product on the primary Swiss Stock Exchange SIX and reported a significant increase in XRP inflows.

Broader XRP Community 

For developers and entrepreneurs, the past quarter presented new opportunities to build various use cases on the XRP Ledger as interest in crypto continues to skyrocket. While no one company or individual can track every project being built on this open-source technology, there are hundreds of use cases from cross-border payments and lending to marketplaces and custody solutions.

Travala, a blockchain-based travel booking platform and used by thousands of customers worldwide, accepts cryptocurrencies as payment.Uphold offers a debit card that enables consumers to pay in cryptocurrencies and fiat.Wirex offers a travel card for customers to exchange and spend cryptocurrencies.Puma Browser is a private, mobile Web3 browser that makes it easy to support micropayments and pay creators using cryptocurrencies.Forte provides tools for game developers to integrate blockchain technology and crypto into new and existing games.Audiotarky is a streaming platform where artists and labels are paid directly using crypto for downloads.

Developers choose to build on the XRPL to take advantage of its green attributes and unique functionalities to move value. The XRP Ledger is the first major carbon-neutral blockchain and inherently energy efficient, alleviating high energy consumption and costs that developers experience when building on proof-of-work blockchains.

Ripple is just one player in a broader community building on the XRP Ledger. Learn more at xrpl.org and in GitHub project repositories.

In this first Ripple Drop for 2021, we explore the power of RippleNet to transform businesses, how RippleX is contributing to the XRPL community and the latest on U.S. crypto regulations.  

Digital Acceleration in Pandemic Drives RippleNet Growth

Asheesh Birla, General Manager of RippleNet, stopped by to provide an update on the global growth of RippleNet over the past year. In 2020 alone, over three million transactions crossed the network, with Southeast Asia leading the charge. He says 2021 is already off to a roaring start, particularly across the Middle East and Latin America. 

Asheesh attributes much of this explosive growth to the acceleration of digital transformation due to the pandemic. Over the past year, RippleNet’s On-Demand Liquidity (ODL) service helped many customers navigate a COVID cash crunch while enabling others to grow and transform their businesses. 

Based on customer demand, he sees tremendous opportunity ahead for RippleNet to offer credit lines and to enable CFOs and Treasury teams to move money instantly around the world 365/24/7 through ODL.

“The digital acceleration caused by COVID is only going to continue in a post-COVID world, and RippleNet is going to be the technology to help you expand even further,” Asheesh says. 

Empowering Developers to Build the Internet of Value

RippleX General Manager Monica Long shares why she’s so excited about the team’s progress inspiring and enabling the global community of XRP developers to build the Internet of Value. 

Monica says the focus for 2021 is on contributing, with the broader XRPL developer community, to a fantastic building experience for developers, and on supporting developers with new programs, demonstrating real-world use cases for XRPL, and introducing key infrastructure elements that promote liquidity and help developer ideas come to life. 

She also highlights a number of exciting new community projects using the ledger, including a non-custodial wallet, an XRP toolkit, and an NFT art gallery. 

“NFTs are obviously a very big deal in crypto, and I think there is a lot of opportunity for developers to sink their teeth into NFT use cases on XRPL,” Monica says. 

Lack of Crypto Regulatory Framework in U.S. Stifles Innovation 

Stuart Alderoty, Ripple’s General Counsel, returns to give an update on crypto regulation in the United States. He is concerned that America’s regulation by enforcement strategy is already driving innovators away to countries like Japan, Singapore, the UK, and Switzerland that have established a clear regulatory framework for crypto. 

Stuart suggests that by issuing lawsuits rather than providing structure and transparent rules, the U.S. is creating uncertainty that hurts markets and consumers while hampering the drive for innovative new approaches to cross border payments, financial inclusion, and more. 

He likens it to driving on the highway without knowing the rules. Posted speed limits and clear guidance allow everyone to travel freely without fear of arbitrary enforcement.

Stuart argues that America would benefit from regulatory clarity: “What we are talking about here when we talk about blockchain and crypto is innovation – a new infrastructure that can improve people’s lives.”

To learn more about new use cases for ODL, Monica’s plans for supporting XRPL developers, or how the U.S. can retain its hold on crypto innovation, check out the latest episode of The Ripple Drop.

Today, we’re excited to announce our partnership with the National Bank of Egypt (NBE), the North African country’s largest bank. Through Ripple’s global payments network RippleNet, NBE has connected with the UAE-based financial service provider LuLu International Exchange – part of the LuLu Financial Group – to process cross-border payments from the United Arab Emirates (UAE) to Egypt.

With a large diaspora employed abroad in the Gulf states – including the UAE – Egypt received $24 billion in remittances in 2020 alone, making it one of the top five remittance recipients globally after India, China, Mexico and the Philippines.

Remittances are vital for the countries that receive them and these funds play a significant role in a country’s gross domestic product. Money sent home to family and friends help to pay for a multitude of necessities – ranging from education to food, to purchasing their own home or starting their own business. 

Yet, the inherent friction in the current global payments infrastructure causes cross-border remittances to be costly and slow. Through this partnership, NBE and LuLu Exchange look to elevate the cross-border remittance experience into Egypt to be cheaper, quicker and more reliable. 

“Egypt ranks amongst the top five countries worldwide in terms of remittances received from its overseas expatriate communities. Given the important role remittances play in the Egyptian economy, the National Bank of Egypt is continuously aiming to develop and enhance the infrastructure which pertains to this line of business,” said Hesham Elsafty, Group Head for Financial Institutions and International Financial Services at NBE.

”NBE’s partnership with Ripple will help to improve overall efficiency by enabling NBE to establish new alliances across wider markets with reduced cost and quicker integration time. We are very excited to announce our new partnership with Ripple and Lulu which we believe will contribute to a further acceleration of the Egypt-UAE remittances corridor’,’ added Elsafty.  

“Our partnership with Ripple and NBE reaffirms our commitment to enhance the payments ecosystem of the MENA (Middle East and North Africa) region through meaningful collaboration and suitable adoption of technology,” said Adeeb Ahamed, Managing Director of LuLu Financial Group. “By unlocking the full potential of the UAE-Egypt corridor, the partnership will help deliver a reliable, seamless and accessible cross-border payments solution for the Egyptian community and businesses in the UAE.”

“The ability to send and receive money quickly, reliably and inexpensively today plays a larger role than ever before,” said Navin Gupta, Managing Director of South Asia and MENA. “Ripple is proud to partner with NBE and LuLu Exchange to bolster the MENA region’s financial infrastructure and provide a frictionless cross-border payments experience for the Egyptian community.”

RippleNet leverages blockchain technology to help partners across a global network accelerate their business performance and scale. It delivers a superior end-customer experience, simplified network partnering, liquidity management solutions, lines of credit, and a state-of-the-art infrastructure that enables real-time payments. If you’re a financial institution looking for a competitive advantage to drive the growth of your business, contact us today.

Unsurprisingly, the pandemic has driven many of us to rely on digital forms of payments over  cash. In fact, 25% of US consumers use less cash now than before March 2020. Additionally, government policies around the world are now pushing towards digital currency adoption to foment contactless payments. For example, China’s central bank branch is looking to eliminate banknotes from certain sectors. But without cash payments, what will be the alternative for central banks?

Enter – Central Bank Digital Currencies (CBDCs). 

The Rise of CBDCs

A CBDC is the sovereign equivalent of private cryptocurrencies and digital assets, issued and controlled by a country’s Central Bank and used by people and businesses for retail payments. The overall mission of CBDCs is simple: to move money like information. To stay on top of today’s constantly evolving digital market, central banks must actively review the pros and cons of offering a private digital currency in their region. In fact, 86% of central banks¹ are already investigating potential CBDC adoption, with over half already progressing from research to pilot projects. 

China has started trials of e-yuan currency, with a proposed launch date of February 2022. European officials want to launch a digital euro by 2025. The Bahamas has put its version “the sand dollar” into circulation². The United States announced it is exploring a U.S. digital dollar³, a tokenized version of the dollar we know. 

This form of private cryptocurrencies is playing a critical role in the new, global financial infrastructure that blockchain technologies underpin. 

Some of the key benefits of CBDCs:

Enhance existing payment system by increasing the speed and efficiency of payments while reducing costs and failure rates.Promote financial inclusion to increase access to financial services for under and unbanked populations. Encourage greater competition by reducing barriers to entry and boosting access to global markets through interoperability.Foster innovation with advanced digital features like smart contracts and programmable money. Maintain control by ensuring Central Banks retain sovereignty over monetary policy and not allow alternative currencies to dominate the market. 

Interoperability: The Key to Success

By 2024, at least half of the world’s population is expected to use digital wallets for transactions that will be valued at more than $9 trillion annually. 

With this in mind, every CBDC will need to have some level of interoperability built in. Interoperability is the ability to share and access information across multiple networks without the need for an intermediary, thus reducing costs and saving time for parties involved. 

A BIS survey¹ found that improving the efficiency of payments was the key motivation for adopting CBDCs. And rightfully so – without seamless domestic and cross-border functionality, most CBDCs will significantly underachieve their potential. 

In today’s globalized world, consumers and businesses will inevitably have a need to transact with foreign suppliers and vendors. CBDCs that are interoperable with each other will give those countries a competitive advantage. Each government can create its own CBDC rules and policies that best suit its domestic market. However, CBDCs should also be united by collective protocols that will enable them to cooperate seamlessly with other CBDCs and digital currencies for simplified cross-border payments.  

The Ripple Impact

In March 2021, we announced our CBDC solution that can provide Central Banks a secure, controlled and flexible means of issuing and managing digital currencies. The CBDC Private Ledger is based on the same blockchain technology that powers the XRP Ledger (XRPL), and it also leverages RippleNet technologies and the Interledger Protocol (ILP), bringing the best technologies together to support central banks’ needs.

Ripple is currently engaging with central banks to discuss how our Private Ledger can help them achieve their CBDC goals. 

We’re looking forward to the next evolution of money.For more details on CBDCs, check out our CBDCs and Interoperability webinar. Get in touch with cbdc@ripple.com to find out how your organization can get involved.

Across Latin America, a fragmented payments landscape has resulted in low interoperability, often leading to high fees for both senders and receivers of payments. Regulators in the region are working — with varying progress and approaches — to enable real-time payment options that foster greater interoperability, increase financial inclusion, generate revenue for banks and businesses and help protect economies from global market volatility. With use cases like inbound remittance flows seen as a critical component of GDP for numerous LATAM countries, identifying ways to reduce costs associated with those remittances is a key driver of regional growth.

At the same time, central banks are becoming more interested in re-examining their relationship with crypto, creating an opening for the crypto and blockchain sectors to help bring forth a unified LATAM payments system to make low-cost, faster and more seamless transactions a real possibility. Of course, not all crypto is created equal. Using a digital asset that was designed specifically for payments will be key to implementing a successful digital payments system that can handle high transaction volumes without friction.

Supporting Trends

Latin America as a region is highly dependent on the US dollar: from US remittance flows and USD as a reserve currency, to economies like Costa Rica and El Salvador that use dollars interchangeably with local bills. Some LATAM businesses even use USD as a liquidity source by routing payments through American banks to transfer funds to international accounts within the region. This reliance on USD means crypto adoption in the States is likely to have a major impact on crypto adoption in Latin America.  

There are also various new fintech players in the market that are working to get involved in consumer payments. From an awareness standpoint, for example, the sponsorship of football clubs across the region by crypto exchanges is helping to bolster public understanding of how to access crypto. Public adoption and embrace of crypto as an alternative to cash holdings or bank accounts is also gaining popularity in some countries as an easier, less volatile alternative to local currency. In one case, the use of crypto as an alternative to cash is being promoted by the government in El Salvador where the adoption of Bitcoin as legal tender is significant. And there are central banks, like that of Brazil and Mexico, that have recognized the value and potential of crypto and have started developing and providing their customers with digital wallets.

Because Brazil is often a leader in Latin America in the adoption of new technology, it’s worth noting that the country is driving smart and progressive crypto use and regulation. In March of 2022, Brazil announced that it had selected nine projects to advance in its quest to develop a Central Bank Digital Currency (CBDC), indicating a real thirst for a digital future. Brazil’s central bank has also been ahead of the curve in showing public-facing interest in the potential of DeFi, NFTs and even the metaverse. And in terms of consumer adoption, Brazil is seeing crypto trading activity boom, portending a bright crypto future for the region.

From a compliance perspective, businesses in the region are able to use the same fiat compliance measures, like Know Your Customer (KYC) and Anti-Money Laundering (AML), for crypto transactions to ensure the safety of these flows and help protect the integrity of the financial system. 

Barriers and Challenges to Success

Because crypto has, at times, been perceived as a threat to the established bank sector — which has historically controlled the financial markets and influenced regulatory and legal structures in the region — any major movement toward crypto is likely to encounter some level of structural resistance. As payments infrastructure is often dictated by larger banks and their governmental relationships, this could make it difficult for digital banks to compete for market share on a level playing field. But, in fact, as we’ll describe below, crypto offers all kinds of financial institutions powerful new business opportunities.

From a consumer perspective, there is also a disconnect between traditional banking and the use of money for everyday transactions across many LATAM economies. Lower incomes often equate to less acceptance of fee-based banking services, meaning that both convenience and efficiency take a backseat to value in many markets. This can manifest itself in people being more willing to wait in line to pay cash rather than incur a fee for an online transaction that might be completed in seconds. Without implementing better ways to make digital payments and financial services available, large sections of the LATAM economy are often left underbanked.  

Lastly, with such a high dependency on USD and US clearing institutions, as costs rise in the States, fear and volatility in the LATAM marketplace also rise. The possibility of insulation from other regions’ financial swings underscores a major reason why achieving interoperability across Latin America and avoiding the de-risking trend in the US is so critical for LATAM economies.

Opportunities and What’s Next

There is a lucrative opening for traditional banks, fintechs and governments to increase adoption of crypto-forward technology to address this underbanked and fragmented market. These challenges will be much easier to solve once digital banks have more ready access to the market, helping drive down high fees and frictions associated with institutionally-controlled transactions. This will also help move people away from physical cash and into the digital payments space — increasing convenience for consumers and creating new markets for both businesses and banks without heavy reliance on the traditional US banking sector.

The COVID-19 pandemic has had a significant impact on both consumers and banks in the region that have historically relied on cash transactions. Many financial institutions are already seeing growth in digital payments due to an uptick in cashless transactions as the region looks for safer, quicker and more convenient payments alternatives. An Americas Market Intelligence study shows that Brazil’s banked population grew to 88% in 2021 with Chile not far behind at 82%. Argentina, Colombia, Mexico, and Peru all experienced growth that year as well. The region will need to continue prioritizing foundational infrastructures like internet connection, electricity, and institutional trust for digital payments to remain viable and financially inclusive. 

Smart and progressive regulation will beget further successful regulation — leading to increased innovation and progress around crypto across Latin America. In the wake of the regulatory debate happening in the United States, there is a large opportunity for banks and fintechs to work with regional regulators to create smart public policy frameworks to ensure that all boats rise.

LATAM is a diverse and varied region, with both developed and emerging economies breaking into the digital payments landscape to varying degrees. But by finding interoperability across the region, Latin America can become more financially independent, more financially attractive to outside investment, and more financially inclusive.

Learn how Ripple’s payments solution can help absorb price fluctuations, allowing for more certainty, visibility and transparency in real-time payments.

Non-Fungible Tokens, or NFTs, are creating tremendous opportunities for creators and collectors of art, memorabilia, and other digital assets. Since the initial launch of Ripple’s Creator Fund, we have seen incredible momentum and exciting NFT use cases come to life on the XRP Ledger (XRPL). Creators like Justin Bua, xPunks, and Sebring Revolution continue to prove out tokenization projects and capabilities for metaverses, gaming, art and beyond.  

Making Waves in Media & Entertainment

Now Rare Air Media, producer of Michael Jordan’s visual autobiography For the Love of the Game, is getting into the NFT game, too. The company is working with VSA Partners, the premier creative agency partner to Ripple’s Creator Fund, to design, develop, and market a range of NFTs on the XRPL, including a one-of-a-kind selection of digital assets covering former NBA player Michael Jordan’s life and storied career. The first batch of NFTs is expected to hit the market in Q2 2022 and will include an intimate selection of original, momentous images of Michael Jordan, accompanied by his personal thoughts and observations leading up to the photo.

As additional use cases for programmable, functional NFTs continue to be built out and tested across industries, the media & entertainment space has been among the earliest adopters of the technology: expanding NFT use cases across music, sports, ticketing, access rights, and beyond. From celebrities like Snoop Dogg and Paris Hilton, to professional athletes like LeBron James, and major brands including Disney and the Grammys — it seems there is no shortage of possibilities for NFT applications in the industry.

High-profile brands, celebrities and their agencies have specialized needs when it comes to identity and ownership of digital assets. The unique security and identification attributes of distributed ledger technology have opened up extraordinary opportunities for creators of digital content to not only assign value to their work, but to profit from it and share behind-the-scenes stories with an even wider audience. With more and more collectors coming aboard the blockchain train, both sides of digital asset commerce can be confident in the assets they purchase and create. 

Why Create NFTs on the XRPL?

The XRP Ledger has ease of use and native token functionality built-in by design. Released in January, NFT-Devnet — a beta environment built to enhance NFT support on the XRPL — lowers the technical barriers to entry for those looking to get started either creating and minting their own NFTs or on behalf of their customers and their brands.

A couple of the key benefits to using XRPL for NFT creation include:

Speed: each transaction on the XRPL takes no more than 3-5 seconds to complete.Low Cost: at fractions of a penny per transaction, costs are inexpensive enough to enable a wide variety of NFT use cases.Sustainable: the XRPL is the first major blockchain to be carbon-neutral — maintaining neutrality since 2020 — and is more efficient than leading proof-of-work blockchains.Simplicity: NFT capabilities on the XRP Ledger pre-program all activities that an NFT user may wish to complete, including minting, burning, trading, requiring royalties, and more.

Created for All Creators

Whether you are new to the NFT space or are looking for a new ledger to build on, the XRPL is customizable to meet your NFT needs—large or small. As one contributor to the growing XRPL community, we’re working closely with developers, creators, marketplaces, creative agencies and brands to help define the future of NFTs and the tokenization of assets in a low-cost, sustainable and accessible way. 

As the Creator Fund and its supported NFT projects continue to grow and gain momentum, especially across the media & entertainment industry, it’s likely we will continue to see expanded uses and partnerships take shape—not only on the XRPL but across the broader tokenization landscape as a whole. 

Check out the Creator Fund for more information or learn more about tokenization on the XRPL. 

RippleX today invites the developer community to provide feedback on its proposal to enhance NFT support on the XRP Ledger.

The widespread use of digital tokens to represent ownership of assets on a blockchain—or, tokenization—is transforming how people buy, sell, track and manage assets of all kinds. With everything from art, and real estate, to intellectual property, equities, supply chain goods, and more being tokenized, this innovation is unlocking a wide range of new efficiencies and new opportunities.

In fact, the World Economic Forum (WEF) projects 10% of the world’s GDP will be tokenized by 2027. That’s only six short years away. The breadth of this transformation—which will be a key pillar of the Internet of Value going forward—means more people will have more access, in more equitable ways, to leverage various types of value for their benefit.

But achieving impact at-scale across so many asset types will require the interaction of different blockchains and existing internet and financial infrastructures. This presents a unique opportunity for the XRP Ledger (XRPL): a blockchain that was created with the design and performance characteristics necessary to handle all types of currencies or assets with high efficiency and at low cost.

NFTs and Today’s Frictions to Adoption

Non-fungible tokens (NFTs) are an important subset of tokens with the potential to powerfully accelerate the burgeoning creator economy while opening access to broader participation in today’s modern financial system. But to realize this broad adoption and vision, developers need new and better platforms upon which to build NFTs.

The first phase of NFT growth and development requires having the right infrastructure in place to enable an accessible, integrated, inexpensive, and open user experience for developers, creators, marketplaces, and consumers alike. For some, the difficulty of navigating the patchwork of new technologies is a key impediment, while the expense of an NFT transaction due to high gas fees is the key barrier to entry for others, while for others still the main blocker is the high environmental cost of creating NFTs on some blockchains. While there is tremendous interest in and growth of NFTs already, all of these frictions stand in the way of a fully modernized and broadly accessible means of creating, sharing and monetizing NFTs.

XRP Ledger: The Blockchain-of-Choice for NFTs

We believe the XRP Ledger is ideally suited to deliver a superior user experience for NFTs and tokenization more broadly. When combined with a robust suite of tools and resources, the innate performance advantages of the XRPL and its native digital asset XRP will enable developers a seamless experience for NFTs.

Cost-Efficient NFTs

Minting NFTs today generates a significant transaction expense. In fact, gas fees – the surcharge covering the computing energy required to process Ethereum-based transactions on NFT platforms – can add hundreds of dollars to the final price of a NFT (fees vary based on a given network’s user traffic and congestion). Thankfully, the XRP Ledger was built to be a more cost-efficient, scalable blockchain, and its coming federated sidechains aim to prevent the potential risk of clogging the network as NFT transactions take off.

Inherently Green by Design

The XRP Ledger also offers another significant advantage over other platforms going all-in on NFTs: sustainability.

Current methods for minting NFTs are highly inefficient in environmental terms due to the carbon footprint of many cryptocurrencies. Because the XRPL uses a novel consensus process for validating transactions, it consumes negligible amounts of energy and is 120,000x more efficient than proof-of-work networks.

Building on the XRP Ledger provides developers a unique opportunity to run more sustainable NFT apps and marketplaces while eliminating a heavy burden for the planet. XRPL’s approach to sustainability also results in cost-efficient NFT projects that are more profitable for creators and accessible for mainstream consumers.

Built-in Token Advantage

More than 5,400 currencies have been issued and traded on the XRP Ledger to date via its  integrated decentralized exchange (DEX). XRPL’s DEX includes autobridging and pathfinding functionality built-in, which finds an efficient path for a payment, potentially leveraging XRP as a neutral bridge asset. Pathfinding also provides a standard for conducting payments in a single transaction, even when the sender has a different token from what the recipient wants.

What’s more, XRPL’s custom token functionality – Issued Currencies – allows tokens of all kinds to be seamlessly and securely settled without a central intermediary. This includes “IOUs”, such as fiat currencies or stablecoins, which are available on the XRPL today for purchase and trading with XRP on the DEX.

Since 2013, the XRPL’s fully-functional DEX has enabled those holding and receiving assets to issue, buy or sell any token—making the XRPL ideally suited for participants building a flourishing, lasting ecosystem for NFTs as tokenization launches into the mainstream.

What’s Next

The developer community around the XRP Ledger is already hard at work proposing features and providing tools and documentation to make XRPL the go-to chain for NFTs. XRPL Labs, for example, proposed a standard for using existing functionality to issue NFTs on the XRP Ledger and started working on an embedded xApp in XRP wallet XUMM for minting NFTs on the XRPL.

Building upon XRPL Labs’ standard, the RippleX team today proposed additional functionality that would provide enhanced NFT support on the XRP Ledger. Pending implementation and an 80% vote in favor of enabling the amendment, developers would be able to support more NFTs at lower cost, offer to buy or sell NFTs, leverage auction functionality, and direct a cut of secondary sales to the original issuer on the XRPL.

There’s tremendous room for growth and exploration in NFTs and tokenization, and we are excited about what lies ahead. Together, we can create the tipping point for mainstream blockchain adoption through a better and more sustainable approach to NFTs.

Developers, we’d love to hear your thoughts on our proposed standard for the XRP Ledger! Head to GitHub to comment and start building today.

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In society today it’s safe to assume that composing, sending, receiving and interpreting email is second nature. We do it across different devices, on the go, in meetings, at work, at home — you name it — and we do it efficiently and effortlessly. If we were to ask Malcolm Gladwell, he’d say that of course we’ve collectively reached this level of competency as most of us have certainly exceeded the golden 10,000 hours rule. But there’s something even more fundamental here: the standardization of information. 

Our standard email contains From, To, CC, Bcc, Subject and Body. Each field serves a specific purpose and meets a minimal requirement in order to send an acceptable message. Even within each field there are norms and standards that apply. Email address structure, for example, includes username@domain. The structure won’t change regardless of your service provider. 

This is how we should think about the structure of cross-border payments. If we want to ensure that the process is efficient, fast, defined and scalable, there simply must be a base level data requirement. Unfortunately, there is no clear standard for cross-border payments — and the shortcomings have never been more evident. 

A World Without (Standards)

In the realm of cross-border payment solutions, a network without standardization is one of inefficiency and redundancy where everything is negotiated on a bilateral basis or dictated by a central operator. If that sounds dramatic, revisit the email analogy — at the bare minimum, there is a constant sense of palpable discord. 

Historically speaking, there have been many different standards followed with various levels of consistency for cross-border payments. As a result, transactions that ought to be seamless and routine create friction and confusion due to incompatible or incomplete data formats. According to a speech made by the Bank of England on the CPMI Building Blocks and Focus Areas for Enhancing Cross-border Payments, 60% of payments require some sort of manual intervention, and this intervention can cost 25 to 30 times the cost of processing the payment itself1. Even more fundamental is the actual definition of settlement finality. Without consistent standards, each institution on a network will maintain differing expectations, resulting in contractual complexities and disparate experiences across multiple partners.

Simply put, global payments standards are fragmented. Correcting what should be typical network activity often requires manual intervention, thus introducing more complexity, more time added and greater inefficiency and increased cost. At Ripple, however, we’ve identified and implemented the solution that our customers are taking advantage of today.

A Single Rulebook Governing a Global Network: RippleNet

At Ripple, we’re empowering our members to define the future direction of cross-border payments. The members — those RippleNet customers who sign on to the membership agreement — drive the evolution of the standards to ease the path to scaling and enhance the payment experience on RippleNet.

When it comes to settlement finality and data standard practices and data requirements, that means clarity over interpretation; unity over differentiation; guidelines over guesswork. RippleNet was founded on consistency, transparency and equality and is proud to be progressing toward this next step in global interoperability. 

Access & Equality

All payment networks have a “payment scheme.” Effectively, that means each has its own definition of a governing rulebook. The scheme typically includes transaction implementation guidelines, operational processes, technical specifications and numerous other member obligations. On one side of the spectrum, there are many schemes that do not allow for any member input whatsoever. On the other end, there are flimsy, inconsistent data standards that cause confusion across the network.

However, RippleNet strikes the sweet spot. There is a single rulebook that members have equal ownership of, and to which members adhere. Even more importantly this rulebook is governed by the members themselves – they have control. Further, the governance and participation model of RippleNet was designed to be inherently agnostic of institution type and location. RippleNet does not differentiate between banks and payment providers — members have direct access and an equal say in the rules for the network.

Consistency & Transparency

The first step was to address the issue of settlement finality on a peer to peer network to   ensure there was a consistent interpretation of data standards across the network. Paramount to achieving this is the ability to provide transparency and predictability to a party’s obligations in a payment, specifically at the moment that obligation to make a payment transfers from one member to another. In turn, we designed a multilateral framework for what would have previously been agreed upon on a bilateral basis.

The second step was to address the widely varying data standards that can exist across a peer to peer network. The key is to enable each member the freedom to operate per their jurisdictional requirements, while at the same time standardizing data to bring predictability to the partnering process and consistent interoperability with domestic networks regardless of the origination and destination of the payment. Through the formal governance structure and the support of Ripple, the members created a global standard for RippleNet — a minimum set of data that is required to be passed between members, with clear guidelines on position, formatting and purpose of the data. 

This clear standardization of data allows the RippleNet network to minimize inefficiencies, redundancies and overall confusion. For RippleNet customers this simplifies the deployment and further reduces operational overhead.

These standards are underpinned by ISO 20022, which is steadily becoming the standard for the world’s cross-border payment flows. In June of 2020 we proudly announced that Ripple became a member of the ISO 20022 Registration Management Group (RMG) standards body — and the first partner focused on Distributed Ledger Technology (DLT). Participation allows Ripple to be the voice of our members beyond the ecosystem of RippleNet.

The world is converging on a new global standard and stepping into the future. As with any challenge yet to be explored, we can’t say for sure what lies ahead, but we’re excited to be leading the charge into the next era of cross-border payments, network interoperability and blockchain technology application as a whole. Interested in joining us on this journey? Learn more here. Check out our ISO 20022 one-pager to get more information on how we’re changing the world of global payments.