Ripple, a cryptocurrency designed for banks and global money transfers, was never much in news in 2017 because its price had somewhat stabilized. The value, although steadily rising, was pretty much a stable affair and garnered no attention.
During the last week of December, a lot of cryptocurrencies started to lose value because of the news that South Korea, a country generally very open to the concept of digital currency, was planning to implement some regulations to control crypto exchanges. Every major cryptocurrency was hurt by this: Bitcoin fell by eight percent, Ethereum lost four percent. Ripple, which holds a market of more than 55 billion dollars, defied all and continued its bullish trend.
People who believed in the cryptocurrency and its processing speed were given a Christmas surprise when the price jumped $1.15 on December, 24 to $2.85 on December, 30 before settling down a couple of days later to $2.34 today.
So what caused the XRP to more than double its value in less than a week? To understand that we need to understand the underlying technology: Ripple, or XRP, is also designed using the latest blockchain technology. The currency’s system is constantly being updated to make it more reliable and cater for scalability and security of transactions being done. One of the most unique aspect of this digital currency is that it eliminates the need of a middle man altogether. If you were to transfer some XRP to another party, you both are directly in contact and know the exact status of the transactions. This makes the transactions extremely fast. A transaction usually take Ethereum minutes, BTC hours and a traditional banking system days to complete, yet the average time of Ripple is in seconds.
As already mentioned, Ripple is designed for the banking sector, it was inevitable that a few financial institutions would pick this cryptocurrency up.
This is exactly what was announced by the Japan Bank Consortium. A group of 61 banks from Japan (yes, this is not a typo- 61!) have collaborated with South Korean banks and are testing transferring money across international borders using Ripple.
SBI Holdings, one of the largest Japanese financial services group also said that it had established partnership with Japan’s major credit card providers such as JCP, Mitsui Sumitomo and Credit Saison through its subsidiary SBI Ripple Asia, to develop a system based on the decentralized ledger technology.
In all, Ripple was unaffected by the Korean government regulations and the force multiplying news of the Japanese pushed people into a buying frenzy in the second and third largest cryptomarket (Japan and South Korea respectively). The sudden sharp rise in the demand caused the price to more than double over a period of 6 days. As the frenzy slowed down in the last days of the year, the bubble lost most nearly half of its air.
Even then, the current price is still above the $2.3 mark.