Is Ripple (XRP) still useful in payments?

Ripple is a blockchain network whose goal is to help companies, especially banks, simplify their cross-border transactions.

Ripple (XRP) price has underperformed the market in the past few months. The XRP token was trading at $0.40 on Thursday morning, down by over 40% from its highest point this year. While Bitcoin is hovering near its all-time high, XRP remains 77% below it highest level in April 2021.

Is Ripple still useful in payments?

Ripple is a blockchain network whose goal is to help companies, especially banks, simplify their cross-border transactions.

Its goal is to solve a key problem that has existed in the financial services industry for many years. This is a challenge where the cost of moving money internationally is expensive and a bit slow. It is often slow because banks are required to hold pre-funded accounts in destination currencies.

Ripple’s solution is to partner with banks and offer them its on-demand liquidity (ODL), which makes these transactions cheap and quick. These customers can leverage the XRP to bridge two currencies in three seconds and at a lower cost.

Ripple also works in crypto custody solutions and crypto liquidity. Its technology can also be used by governments seeking to launch their Central Bank Digital Currency (CBDC). It has partnered with companies like Novatti, Palau, RocketFuel, SBI Remit, and Tranglo.

Ripple’s XRP underperformance has led to a core question about whether Ripple is still needed in the payment industry.

Ripple is facing two main competitors. First, stablecoins have become highly popular in payments in the past few months. Today, Tether (USDT) handles over $50 billion worth of transactions each day. Newer stablecoins like PayPal (PYSD) and Ethena USDe are gaining market share.

Therefore, instead of using Ripple, many companies seeking quick transfers have embraced these stablecoins because of their speed and low costs.

Second, some big banks have embraced the concept of tokenization in money movement. This includes companies like ANZ Bank and JP Morgan. These tokenized platforms could move money faster and at a lower cost.

There are other concerns about Ripple’s ecosystem. First, it is unclear whether the XRPL platform will attract enough developers because of the vast competition in the blockchain industry.

Second, it will take much effort for Ripple’s planned stablecoin to gain market Share because of Tether’s dominance.

XRP price analysis

The weekly chart shows that the XRP token price topped at $0.9347 after the Ripple vs SEC case verdict in 2023. Since then, it has dropped to a low of $0.40, where it has found substantial support. This price coincides with the ascending trendline shown in black.

The XRP price has moved below the 50-week moving average while the Relative Strength Index (RSI) has pointed downwards. Therefore, the outlook for the token is bearish, with the next point to watch being at $0.2912, its lowest swing in 2022.