All Eyes On Ripple. But What Is It?

Its plan to create a global payments system for banks got swept up in the crypto craze

- Matthew Leising and Edward Robinson

Every day, companies and consumers around the world send more than $76 billion in payments through a vast network of banks. Without the flow of money, container ships stay in port, workers don’t get paid, and supply chains break down. For the past seven years, Ripple, a tech company in San Francisco, has vowed to use the blockchain wizardry behind Bitcoin to rewire this global circulatory system with what it calls an “internet of value.”

That in itself would be a fairly interesting business story. But then Ripple became a part of the great cryptocurrency melt-up of late 2017. The company owns a lot of a digital token called XRP. From late September to early January, XRP saw an astonishing 1,300 percent increase in value, blowing away the gains of rival virtual currencies Bitcoin and Ether and turning its executives into paper billionaires. One rationale for buying XRP is that unlike Bitcoin, the token has one narrowly defined but clearly useful purpose: to help banks move cash from point A to point B faster and more cheaply, especially across borders.

The problem is that banks say they have no interest in using XRP. Current and former executives at seven global banks—some of whom have partnered with Ripple—say there was scant chance they would ever entrust their corporate clients’ payments to a cryptocurrency. The executives requested anonymity.