Today Ripple announced a new crypto solution, the Ripple Liquidity Hub, that’s not limited to XRP and targets enterprises. To be launched next year, it enables aggregated access to cryptocurrency market makers, exchanges and OTC desks. The company is targeting existing RippleNet clients that want to offer cryptocurrency services to their customers.
While Ripple’s products have morphed over the years, most recently, it has two core solutions. The first is RippleNet, a payment messaging service used by financial institutions that does not use cryptocurrency.
Secondly, there is its On-Demand Liquidity (ODL) solution, which enables companies and money services businesses, in particular, to use the XRP cryptocurrency as an intermediate currency to send international payments without using the correspondent banking system.
Bankers we’ve spoken to have been frustrated that many people conflate these two applications. Other than mentioning that XRP will be one of the cryptocurrencies supported by the Liquidity Hub, this solution is not mentioned as using XRP. However, it says it used something similar to support the ODL product. That clarity would be good to avoid further misunderstandings.
In a blog post, Ripple stated, “while the XRP Ledger and XRP are and will remain a native part of our tech stack, we at Ripple believe that achieving interoperability is key to unlocking crypto’s true potential.”
The other cryptocurrencies are Bitcoin, Ethereum, Litecoin, Bitcoin Cash and Ethereum Classic. We asked Ripple whether all cryptocurrencies will only be exchanged for XRP as an intermediary currency. The answer is no. “Trades will occur in fiat and depending on the region. eg. USD in the U.S. and could be GBP in the UK,” said a spokesperson via email.
“We understand firsthand the need for easy and efficient liquidity management – and as such, we’ve received questions from our customers who are in need of solutions that can be a one stop shop to buy, sell and hold crypto assets,” said RippleNet GM Asheesh Birla.
“The combination of Ripple’s crypto DNA and long history working with financial institutions makes us uniquely positioned to address this problem for our customers as they prepare for a tokenized future.”
Bitcoin ATM company Coinme is the first customer for the solution. There are also plans to extend the offering to include staking and yield generation.
The SEC has sued Ripple and its CEO and Chairman claiming that XRP is a security. The court case is ongoing.
Update: Added the response from Ripple regarding trades being in fiat.