on the crypto
By its design, Ripple's XRP is considered the best established cryptocurrency for banking institutions to trade on Bitcoin Pro, in particular for cross-border transaction services. However, despite Ripple's high levels of compliance and well-developed new financial products, banks have not taken a bias towards XRP.
Ripple's CTO on low cryptocurrency adoption
Early ripple investors expected that, by 2020, XRP would have massive adoption and an exponential rise in its value, but the reality is different. Not only is XRP shunned by new institutional investors in the cryptocurrency market, but banks are also apparently unprepared or reluctant to incorporate XRP as a bridging service.
According to David Schwartz, CTO of Ripple, Ripple's disappointing adoption rate is due to a number of obvious obstacles. Schwartz pointed this out during an exchange of ideas with the Ripple community citing XRP's expected low performance for 2021. He spoke in particular of regulatory uncertainty, last-minute problems and fear of competition.
XRP fails to gain momentum
Aside from the hostile crypto regulatory framework especially in the US, Schwartz said Ripple users are waiting for more banks to push to grow the user base.
He went on to highlight another important aspect, which is the potential number of customers who will use the bridge assets to create new products. They embody the best of the company, as they are highly motivated to see the projects come to fruition and will drive the benefits their projects bring to the end.
However, due to low adoption due to banks preferring to use more familiar and well-known traditional services, full products on Ripple will continue to have less traffic.
"Even when they are 100% ready, they will still have 0 customers because the product is new and therefore slow to gain momentum." Furthermore, Schwartz stated that XRP is highly reliant, as a new product, on the willingness of banks to adopt cryptocurrencies or not.
But perhaps Ripple's plan to exit the US market and head for jurisdictions where cryptocurrency regulation is friendlier, such as Europe or Asia, could make XRP not have to wait for more banks to express their interest in using cryptocurrencies, Schwartz added.
XRP excluded from PayPal
Although it is the fourth largest cryptocurrency by market cap, XRP has had a tough year, with 27% year-to-date growth and 18,6% decline over the same period. The cryptocurrency was also excluded from the price hike of major digital assets last week after Paypal announced that it did not include it in its new crypto services.
