Blockchain technology and its accompanying umbrella known as DLT have been cited as one of the most revolutionary creations of recent times. They have emerged as disruptive and innovative technologies, a strategy used by Ripple to great effect.
Dilip Rao, Ripple’s Global Head for Infrastructure Innovation, appeared on a panel discussion at the Global Islamic Economic Summit, wherein he spoke about innovation in the Financial Technology space. He also offered his opinion on SWIFT, the existing incumbent in cross-border payments and Ripple’s biggest competitors.
“I think generally innovation is held back by your legacy systems and I think sometimes if a legacy system is so old that you want to throw it in the in the in the dump, you don’t have to worry so much about what you’ve got you just say I’m going to dump this I’m going to go to the new shiny thing.”
Rao stated that a lot of “Europeans and Americans” are still “loving and tending to their legacy systems”, which is why they don’t let go of them. However, in the Middle East, he stated that he has observed an “aspiration” towards innovation.
Even as the cryptocurrency space is pushing the envelope for what is possible, a majority of investors are utilizing them to “make a quick buck”. When asked about the general state of the cryptocurrency market, and the reasons they are utilized like this, Rao mentioned it as a “chicken and egg” problem. He went on to say:
“You have to create a marketplace. Right now we have 150-200 exchanges around the world that trade XRP. A lot of it is, as you say, very shallow trading by individuals and that is not the use case that we are pursuing.”
The use of XRP that is being pursued by Ripple is as a financial asset for bridging the gap of liquidity. Rao stated that it did hurt the space. He also spoke about institutional investors, stating:
“In this last quarter the bulk of XRP sales were institutional investors. As this transitions away from retail to institutions, we’ll start to use it for wholesale financial usage that’s when the turning point will come.”
The executive also mentioned that this was the only region in the world where SWIFT does not have any fans. He stated that the region recognized that there was no need for a reliance on a centralized hub and spoke architecture. He went on to say:
“Where there’s 50% of trade happens within ASEAN, they don’t need to use a global platform to do that if they can run it on a peer-to-peer basis. I think strategically what DLT offers this part of the world is very important.”
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