It is hard to ignore China for anyone, and that is what Ripple Labs or its digital coin, XRP, is doing. The company is focusing on the second biggest economy so that it could widen its operations, as well as, services. An indication to this effect was made by its EU Strategic Accounts VP, Jeremy Light, recently. Currently, China has slapped a ban on anything that is related with cryptocurrencies to protect its investors and curb malpractices though it is keen on the blockchain.
Ripple has already commenced its efforts to expand its operations in the East Asian region, cryptoglobe.com reported. This is quite evident when it struck an alliance with LianLian International, a Hong-Kong based financial services provider. In February, the two have agreed to enable facilitation of not only quicker but also cost-effective cross-border payments among the mainland China and Hong Kong. This process would be done with the help of Ripple’s range of financial products.
Aside from this, Ripple’s alliance with the Hong Kong firm provided an opportunity to process international payments to the United States and Europe from Hong Kong through the XRP digital coin. The primary difference between XRP and most other big virtual assets is that centralized entities like conventional financial institutions, as well as, enterprises, validate its transactions rather than individuals validating them. Additionally, the digital currency is a pre-mined one thus suggesting that it has already reached its optimum level of supply at the first launch itself.
That would mean that it would not have to depend on mining, which is an energy intensive process. It would not be an easy task for Ripple to enter the Chinese market given the fact that there are restrictions on the trading of any digital coins in the country. The authorities have cracked their whip on the virtual assets sector, and that resulted in Yuan to bitcoin trading dropping to less than one percent of the trading volume at international levels.
The regulator in China was concerned after cryptocurrencies have hit their roof-top prices towards the end of the last year. As a result, it has increased its surveillance on any projects that are associated with the digital coins as the number of scams and fraudulent schemes has increased. In 2017 itself, the country has imposed its ban on initial coin offerings (ICOs), i.e., well before the peak of the market.
However, Ripple is undeterred and going ahead with its strategy to penetrate into the Chinese market. This is evident in more than 100 financial service providers working closely with the firm. This included UniCredit, Standard Chartered, UBS and Spain’s Banco Santander. Still, the company could strike an alliance with only one company suggesting that it would take a long time for the enterprises to look at its financial products.
That suggested that the company is in its nascent stage of exploring its possibilities in the fintech sector in China. There is also a concern that several of Ripple’s projects are either in experimental or pilot stages. That could be interpreted as conventional financial service providers are not keen on using XRP though money transfer firms are testing it.