Category Archives: Ripple

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Ripple’s Brad Garlinghouse Slates JPMorgan’s JPM Coin as Lacking Innovation

Wall Street banking giant JPMorgan’s announcement of its new stable coin JPM Coin, has Ripple’s boss Brad Garlinghouse criticizing its “closed network” lack of innovation.

JPMorgan says it sees potential in using digital coins to reduce risk and enable instant transfers, despite JPMorgan’s chief executive Jamie Dimon criticizing Bitcoin since it emerged as the industry’s flagship cryptocurrency.

The bank says it has always “believed in the potential of blockchain technology”. “We are supportive of cryptocurrencies as long as they are properly controlled and regulated,” says Umar Farooq, JPMorgan’s head of Digital Treasury Services and Blockchain. The new JPM coin will be transferable between client accounts at the bank, who will then be able to redeem them for US dollars pegged at parity with the coin.

With the arrival of JPM, the volatility of Ripple’s XRP is brought into question and certainly draws obvious comparisons, to which Garlinghouse has reacted by saying there is nothing innovative about JPMorgan’s final arrival into the cryptocurrency space, arguing:

“As predicted, banks are changing their tune on crypto. But this JPM project misses the point – introducing a closed network today is like launching AOL after Netscape’s IPO.”

His comments very much echo the sentiments illustrated in an article he wrote two years ago called “The Case Against BankCoin,” in which he argued that banks should be using XRP as the obvious independent digital asset, claiming they offered “universality” which bank coins did not:

“It goes back to the fundamentals of what makes digital assets unique and special – they’re universal currencies, meaning anyone can use them as units of value anywhere in the world. That universality gives digital assets global reach and the ability to settle much faster than traditional assets.”

Clearly, Ripple’s executives would argue that users of XRP also has the added option to speculate, holding on to the currency in the hope of trading later at a higher value; compared to bank coins which will only have a fixed settlement value based on parity with the US dollar.

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Exchange Listing XRP Says Ripple “Not Crypto”

Exchange Listing XRP Says Ripple

An exchange that has recently added Ripple to its trading platform is happy to proclaim that in its view, XRP is a “Centralized Virtual Currency“, not strictly a cryptocurrency.

The Finnish-based Coinmotion exchange’s definition for users could find that many enthusiastic customers may not be happy to read it:

“What one needs to know about XRP is that it is not cryptocurrency in the strict meaning of the word… What differentiates XRP from cryptocurrencies is that it is not based on blockchain, it is not mined and it is heavily centralized. Ripple network is a suite of different applications by Ripple Labs. XRP, is the currency of Ripple network, which the apps use.”

Ripple CEO Brad Garlinghouse claims that XRP is in fact “very clearly decentralized”. The company has been moving from strength to strength within the industry, particularly with its link to traditional banking. Ripple Labs announced the addition of 13 more financial institutions to its RippleNet in January, which now takes the total to over 200.

Coinmotion’s blog claims that Ripple’s network doesn’t use blockchain but relies on a Ripple Labs patented system called HashTree adding:

“In HashTree all the transactions and balances are combined to a single number, which servers compare to each other to reach consensus. This kind of system is faster than blockchain, but far more centralized.”

The Finnish exchange ends its blog with a rather curious note to users, given that it chose to list XRP, stating, “Nonetheless since You, our dear customer, have asked for it, we have offered you the possibility to buy and sell XRP on Coinmotion.”


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Report Claims Ripple Tempts Recruits with Generous XRP Packages


Ripple has recently claimed that it had no role in the development of the cryptocurrency XRP. However, reports are surfacing that claim the company was found utilizing its huge XRP reserves to attract potential hires.

It began with a media report claiming that an engineer was offered an XRP pay package by Ripple. The engineer, whose name has not been named, said that he received an email in late 2018 from the company stating that along with a generous salary, he would receive XRP worth USD 3 million.

For its xCurrent project, the company is looking to hire a new engineering head in addition to more than 12 technical experts and engineers, as stated on Ripple’s LinkedIn profile. xCurrent project is looking to challenge SWIFT (a legacy messaging network).

This is not the first time that Ripple has faced these allegations. In September 2018, an engineer requesting anonymity told the media about a similar email from the company offering him a generous XRP bonus package.

On the basis of the data obtained from two potential recruits, the general range of bonuses in XRP for engineers is from USD 1-6 million. However, these salaries are based on seniority.

A former Ripple employee revealed that it is a standard in Silicon Valley to offer generous equity deals to new recruits. However, he noted that before 2017, he never heard of anything like XRP bonus packages.

Nevertheless, the company has refused to comment on bonus packages. It is uncertain whether these packages are still being offered or not. The overly centralized nature of XRP is a much-debated topic within the crypto community and will draw further flak if it is proved that the company’s infrastructure is completely centralized.


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EU Parliament Member Praises Euro Stance on Blockchain, Digital Assets

EU Parliament Member Praises Euro Stance on Blockchain, Digital Assets

Eva Kaili, a member of the European Parliament, the body which exercises the legislative function of the EU, has been speaking out about cryptocurrency and the progressive stance of EU member states towards it.

Speaking at a Ripple event in London recently, Kaili, a former television news presenter who represents the Panhellenic Socialist Movement, was telling her audience how blockchain technology’s disruption of various sectors was beginning to be understood by many EU member states.

She was highlighting the contrast between the industry now and how it was a few years ago in the early stages of its development,  indicating that this was gradually leading to a more positive reaction from EU banks and financial institutions, primarily due to recent regulation.

According to her, another reason for blockchain not being resigned to becoming just another clever idea was the growing mainstream acceptance of the technology by leaders across the world. The stance by these over the past five years has changed noticeably as more and more digital currencies reach acceptance and blockchain becomes a feature of many huge institutions’ business plans.

A major focus of many of these institutions has centered around remittances and cross border payments, which have been clearly improved through blockchain technology. One example being Ripple, the hosts of the event, who maintain that their cross-border payments are becoming both quicker and cheaper as new tech is developed.

MEP Kaili has long been a blockchain and crypto advocate in the European Parliament. In November, she spoke exclusively to Bitcoin News about the Parliament’s release of EUR 700 million for startup projects promising “great solutions” with blockchain.


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Ripple Initiative Results in $1 Million Windfall for University of Michigan

Ripple Initiative Results in  Million Windfall for University of Michigan

The University of Michigan (UM) in the US is to establish a collaboration through cryptocurrency through Ripple’s University Blockchain Research Initiative (UBRI).

Michigan has joined a number of universities, now numbering 11 in all, who have formed a partnership with Ripple under the scheme aimed at supporting academic research, technical development, and innovation in blockchain, cryptocurrency and digital payments.

UM has announced that it plans to encourage multidisciplinary curricula in fintech through the creation of a center which will also focus on engineering and business use cases for cryptocurrencies in new applications such as smart cities. A statement from the university announced:

“The most important thing this funding allows us to do is integrate the engineering and data science with finance and policy to craft financial models to fund infrastructure, developing models to close the infrastructure finance gap.”

The grant of USD 1 million as part of Ripple’s USD 50 million UBRI, includes some of the world’s most prestigious universities including Princeton University, MIT, and University College London (UCL). Several universities across the US, along with others in South Korea, the Netherlands, Luxembourg, India, Brazil, Cyprus, and Australia are also included in the project, giving the initiative a distinctly international flavor. Last year Ripple contributed USD 50 million as part of the same initiative in South Korea alone, demonstrating the company’s intent to promote more interest in cryptocurrency in that country.

The new center at UM, to be named The Center for Smart Infrastructure Finance, will support interdisciplinary initiatives along with the College of Engineering, Ross School of Business, Ford School of Public Policy, and the College of Literature, Science, and the Arts.

Senior vice president of global operations at Ripple, Eric van Miltenburg, sees such collaborations as a necessary step towards pushing blockchain technology forward. He commented.

“In less than a year, we are already seeing UBRI partners create new cross-disciplinary research programs and courses, as well as collaborate with one another to share ideas on how to grow the blockchain ecosystem,” said van Miltenburg.


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Ripple: Overvalued, Centralized, or the Next Bitcoin?

Ripple_ Overvalued, Centralized, or the Next Bitcoin_

Ripple has, in some form, been around longer than Bitcoin. Yes, it shares a certain peer-to-peer ambition with Bitcoin, but there is no denying that it leans towards centralization and favors big banks in a way that Bitcoin simply does not.

Now central banks and even American Express are getting involved with Ripple, what is it that makes this blockchain payment system so much more appealing to the mainstream financial system, and is its growing popularity sustainable?

The changing technology

Ripple’s first payment system ‘RipplePay’ dates back to a pre-Bitcoin era, launched in 2004 and lasting until 2012. The original payment architecture was based on a peer-to-peer network that allowed individuals to loan to each other, with payments acting as updates to loan balances. Payments required a path of trusted relationships between payer and recipients, which acted as IOUs being passed along the chain.

This original model was critiqued as leaving the system exposed to centralization around several large banks because of the difficulties in authenticating the trust networks as reliable.

When Bitcoin started gaining traction in 2011, much of Ripple’s target demographic shifted towards Bitcoin because of the cryptocurrency’s superior architecture. Both payment networks share a similar ideology, and there has been an overlap between the two even in terms of developers. Early Bitcoin pioneer Jed McCaleb joined Ripple in May 2011, with the technology changing significantly in just a few years after his arrival, although he left the company sometime between 2013 and 2014.

Ripple’s native token XRP was released in January 2013, operating on a public chain of cryptographic signatures as does Bitcoin, meaning the original web of trust was able to be dropped.

Why some claim Ripple is centralized

Ripple is marketed as a decentralized payment system, but the actual consensus protocol has been shown to show something quite different. Researchers from leading exchange desk BitMEX conducted in-house testing of the technology, in which time they found that the company behind Ripple was ”essentially in complete control of moving the ledger forward”, leading them to dub the system centralized.

While the research team noted that there was nothing inherently wrong with centralized systems, saying that indeed they can be easier and more efficient to run, they noted that the actuality of the protocol was at odds with how it was being marketed. ”Some may consider [it] misleading,” they added.

Close ties with central banks

In recent months, Ripple has hit the headlines for its partnership with major banks, facilitating cross-border payments through Ripple-enabled gateways.

In December 2018, the central bank of the middle eastern nation of Kuwait became one such Ripple gateway client, using the network for blockchain-backed direct transfers to the neighboring country of Jordon. Ripple’s “fast remittance service” claims to be quicker and cheaper than the current services, available online 24 hours a day rather than operating with a standard bank’s 9 am to 5 pm service.

Even Bitcoin nemesis American Express has praised Ripple’s cross-border payment system, saying the blockchain system has the potential to revolutionize international payments. It has tested Ripple payments for use by American Express clients and is reportedly leaning in favor of the system for its own blockchain exploration.

Some see Ripple’s close relationships with central banks as a positive indicator for the cryptocurrency market and wider adoption, while critics suggest it is just another indicator of the network’s vulnerability to centralization. Already failing the censorship resistance that Bitcoin boasts, some have suggested it fails to offer any particularly substantial technological innovation also.

Overvalued by billions of dollars?

Ripple has surpassed Ethereum in terms of market cap, taking place as the second largest cryptocurrency by volume. However, a recent report by cryptocurrency analytics firm, Messari, suggests that market capitalization of XRP may be overvalued by around USD 6 billion. The prognosis is based on data retrieved from both cryptocurrency exchanges and third-party cryptocurrency data services in a review of XRP’s ”health and legitimacy”.

Messari suggests there could potentially be an enormous 48% overvaluation of the cryptocurrency’s liquid circulating supply, with the disparity created in large part by ”significant sell-side pressure in the XRP market”. Other discrepancies the research body considered include questions as to whether the XRP 5.9 billion foundation contribution that was made by CEO Chris Larson and XRP 2.5 billion held by RippleWorks are included in the market cap, both of which are technically illiquid assets. Other queries were raised over Ripple assets that face selling restrictions.

Without full disclosure from Ripple, Mesari acknowledges its figures are only estimates. At the time of press, Ripple has yet to disclose its own methodology for calculating the trading volume of XRP.

XRP sales are falling

Ripple’s Q4 2018 report published 24 January 2019 shows that token sales are falling; Q3 boasted sales of USD 163 million, falling to USD 129 million in Q4. Sales in Q4 represent just 0.16% of Ripple’s trading volume.

While the cryptocurrency market as a whole remained in a bear market during this period, it is perhaps unsurprising to see sales fall. Nonetheless, Ripple benefited from growing support from central banks and governments during this period, which should have been an opportunity for XRP to prove its individual strength in a bad environment.

If Ripple’s top strength of receiving support from the mainstream is not enough to convince investors, that is not great news for XRP moving forward, particularly if the cryptocurrency market continues to perform poorly.

Q4 2018 also saw XRP’s volatility decrease in the market, as did BTC at that time. Its daily returns volatility was 5%, marking the lowest quarterly average since Q4 2016.

Many questions remain

Ripple has been adopted by a number of banks and payment networks and is recognized as a secure settlement infrastructure technology, praised for its efficiency.

But there are certain points where the project lacks total transparency.

For one, it is not as decentralized as marketing would imply, and there are a lot of questions remaining over what is exactly going on with XRP’s market cap calculations and restricted assets.

It is no Bitcoin, but it would seem to have found its comfortable place alongside mainstream finance, coming as close a blockchain payment network has got so far. Whether that will be enough for XRP to continue succeeding in the cryptocurrency market is questionable.


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Romanian Crypto Nest Eggs Decimated by New 10% Tax

Romanian Crypto Nest Eggs Decimated by New 10% Tax

Romania, Europe’s third-poorest nation (GDP per capita), has amended its taxation rules in order to accommodate those taxpayers with cryptocurrency earnings, now setting the rate at 10%.

Income for cryptocurrencies is now regarded by the taxation authorities in Romania as “income from other sources” and are therefore taxable. It is a move very much in line with many other countries across Europe who have been re-examining their tax laws as they apply to cryptocurrency earnings.

According to a local daily Ziarul Financiar, who quoted tax consultant Adrian Benta, this means that only gains will be taxed as opposed to revenues. Gains from transactions below RON 200 (Romanian ron worth USD 50) won’t be taxable under the new laws, but any earnings above RON 600 (USD 150) per annum will be liable for the 10% tariff. Benta suggested that the new rate was fair:

“Before this, we had a more cumbersome procedure in which one had to register as freelancer if he was trading repeatedly. It is now treated as an extraordinary income from other sources.”

Under EU leadership, cryptocurrencies are still closely monitored by the Romanian authorities as all jurisdictions in Europe continue to regulate the industry. In the hope to further encourage cryptocurrency adoption throughout Romania, the country’s top exchange Coinflux added Ripple to its trading platform last year by popular demand from clients.

Coinflux facilitates users in trading across cryptocurrencies and also with fiat currencies like Leu or RON.


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Can Japan Make Bitcoin Splash at Tokyo Olympics?

Can Japan Make Bitcoin Splash at Tokyo Olympics?

Those promoting the adoption of Bitcoin and other cryptocurrencies as a form of payment in Japan will be hoping that next year’s Games of the XXXII Olympiad (Tokyo Olympics) will bring out the crypto spenders.

The Japanese are traditionally a nation of cash spenders, unlike China and South Korea who have taken more to credit and debit cards for their daily needs. Consequently, ATMs abound in Japan, some 20,000 of them at last count, all dispensing Japanese yen, although local crypto advocates would love to boast such numbers dispersing Bitcoin and other cryptocurrencies to the general public.

Next year’s summer Olympics has been seen as an opportunity to decrease the cash imprint, in line with Prime Minister Shinzo Abe’s aim for 40% of payments to be cashless in the county by 2025. The hundreds of thousands of visitors attending the summer Olympics in 2020 has become a tantalizing prospect for some in Japan’s crypto space.

One of these is American internet company Akamai who has teamed up with Japan’s largest bank Mitsubishi UFJ Financial Group (MUFG) to build a blockchain-based consumer payment network to be used during the main event next year. Tests, according to the companies, have yielded speedy results with more than a million transactions per second, with each transaction confirmed in two seconds or less.

MUFG is moving towards closer towards cryptocurrency, albeit having taken some time to consider the step, and along with other Japanese companies has been experimenting with DLT for some time. Two other companies, Mizuho Financial Group, and SBI Holdings are both in the process of producing their own digital coins.

With Ripple lining up to become the official cryptocurrency of 2020 Olympic Games after last year’s petition which gained 14, 115 supporters, the summer Olympics is proving that it could become a crypto battleground for some of the major tokens as 2020 approaches.


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Ripple Supports China’s Fintech Youth at Tsinghua University

Ripple Supports China's Fintech Youth at Tsinghua University

Ripple continues to expand its collaboration with universities in Asia with its latest blockchain research program at China’s Tsinghua University.

This Blockchain Technology Research Scholarship Program (BRSP) scholarship will only be available to graduates in 2019. It is principally aimed at the development of blockchain tech and international regulatory policies and will give participating students the opportunity to work on global policies related to blockchain technology.

San Francisco-based Ripple is gaining a global reputation for its graduate programs. In 2018, the company put USD 50 million into another Asian initiative, this time in South Korea. The University Blockchain Research Initiative there included 17 universities across the country.

Regarding its latest graduate initiative, Ripple’s SVP of Global Operations, Eric van Miltenburg, was impressed with the university’s forward-thinking approach to bringing the country’s youth into DLT. He said:

“The program’s goal – to provide students with opportunities in blockchain research – closely aligns with that of Ripple’s University Blockchain Research Initiative; we’re thrilled to support Tsinghua University in this endeavor and look forward to its launch.”

The university’s response to the latest research initiative was one of encouragement for students to go forward in the industry by becoming skilled in the latest international relations and rules surrounding the industry.


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BitMEX CEO: Bitcoin Is Society’s Best Hope for a Private Form of Electronic Money

BitMEX CEO_ Bitcoin Is Society’s Best Hope for a Private Form of Electronic Money

BitMEX CEO Arthur Hayes has spoken out in favor of Bitcoin, saying that the hallmark cryptocurrency is “society’s best hope for a private form of electronic money.”

The company is a cryptocurrency exchange and derivative trading platform. It is owned and operated by HDR Global Trading Limited, which is registered in Seychelles and has offices worldwide.

In a blog post published before the weekend, Haye’s latest thoughts on the industry entitled ‘Two sides of the coin: the bifurcated near-future of money’ suggested that the future of Bitcoin is ensured, commenting:

“Even in the face of the various centralized forces currently being marshaled: humanity’s bifurcated monetary future will be better than our monopoly monetary past, as some money becomes more convenient while other money becomes far more private.”

Hayes further suggested that until now, monetary systems had been dominated by monetary monopoly and a bifurcated system with Bitcoin representing the cryptocurrency industry would be the best hope for the future, despite the proliferation of alternatives such as Ether, Ripple, and others.

According to the BitMEX boss, another advantage that Bitcoin possesses when squared up against others is its security, having never been successfully hacked in its ten years of use. Painting a rather utopian picture of a background in which cryptocurrency can flourish, he went on to say that he felt Bitcoin could create an environment where individuals can work together towards a common end.

Hayes’ positive comments were made only weeks before he expressed his views about Bitcoin at the end of 2018, suggesting that it would continue its volatile bearish trend in 2019.

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