Financial technology start-up Ripple announced a new product on Tuesday that allows financial services organisations to provide their customers the option to purchase and sell bitcoins.
The tool, dubbed Liquidity Hub, will provide enterprise clients access to digital assets from a variety of sources, including market makers, exchanges, and over-the-counter trading desks, according to the San Francisco-based startup.
Clients will be able to trade bitcoin, ethereum, litecoin, ethereum classic, bitcoin cash, and XRP among other cryptocurrencies, according to Ripple. In the future, the company hopes to offer other digital assets such as non-fungible tokens, or NFTs. The feature is presently in beta, but it is expected to arrive in 2022, according to Ripple.
Ripple, which was founded in 2012, is closely linked to the cryptocurrency XRP. With its On-Demand Liquidity product, the company sells XRP to financial firms as a form of “bridge” for speeding up international transfers.
According to CoinMarketCap data, XRP is the seventh-largest digital currency in the world, with roughly $60 billion worth of tokens in circulation.
Ripple also sells RippleNet, a financial communications service that banks and other financial organisations use to transmit money across international borders. Ripple positions itself as a rival to SWIFT, the world’s largest interbank payment network.
XRP is the world’s seventh-largest digital currency, according to CoinMarketCap, with around $60 billion worth of tokens in circulation.
RippleNet, a financial communications service used by banks and other financial institutions to send money across international borders, is also sold by Ripple. Ripple seeks to compete with SWIFT, the world’s largest interbank payment network.
The company is entering a new product category at a time when cryptocurrency enthusiasm is at an all-time high. The main and second-largest cryptocurrencies, bitcoin and ether, both set new highs this week amid a broader rise in the crypto market.
Crypto is also gaining traction among mainstream businesses, with Mastercard, PayPal, and Goldman Sachs all announcing support for digital assets.
RippleNet’s new tool, according to Asheesh Birla, general manager, may be viewed of as a “aggregator for numerous liquidity venues and individual assets, similar to how Google Flights is for airlines and flights.”
According to Birla, the product has been in the works for nearly two years. Coinme, a bitcoin exchange and ATM operator based in the United States, is Ripple’s first customer.
“We have a long history of working with financial institutions, crypto exchanges, brokerages and market makers, which our enterprise customers can now directly benefit from,” Birla told CNBC. “We’re planning to support a variety of assets and have plans to expand to more tokenized assets like NFTs in the future.”
Ripple said it will also provide its banking partners XRP-based lines of credit to avoid them needing to pre-fund Liquidity Hub accounts.
“Companies doing this today have to park working capital at an exchange while waiting for funds from weekend activity to be deposited in a bank account,” Birla said. “We started offering this as part of ODL and it’s one of our most sought after features.”
Ripple is one of the world’s largest crypto start-ups, with a private market cap of $10 billion. Venture capital firm Andreessen Horowitz, Japanese financial services business SBI Holdings, and Spanish bank Santander are among the startup’s backers.
However, the corporation has faced significant regulatory uncertainties in the United States. Nonetheless, Ripple claims that it is gaining popularity in other areas such as Japan and the United Kingdom, with international volume at its ODL crypto product increasing 25-fold since the third quarter of 2020.
“Despite headwinds in the U.S. with the SEC, our traction with customers globally hasn’t slowed down,” Birla said.