XRP, the cryptocurrency associated with payment network Ripple, temporarily overtook Ethereum in market capitalisation earlier on Tuesday.Be sure to waive at @VitalikButerin as we sail past later this week for the final time. pic.twitter.com/JssU8DJ6NV Join the Leading Industry Event! — SamIam (@Ripple_Me_This) November 6, 2018
This appears to have been driven at least partially by a popular rumour on the internet – that an upcoming upgrade on the SWIFT network will make Ripple products available to around 4,000 extra banks. A SWIFT spokesperson told Finance Magnates on Tuesday that these rumours are untrue.Market Fundamentals
To get the underlying factors out of the way: Ethereum has been number two in the cryptocurrency rankings as consistently as Bitcoin has been number one. XRP overtaking it in value, however briefly, was quite a coup.
However, it is not so surprising. Over the last year, Ethereum has been declining in value due to competition from new smart contract platforms, and upgrades which seem to be permanently stuck in the ‘coming soon’ stage. Ripple, on the other hand, has been signing deals with major financial institutions left, right and centre.The Upgrade
The SWIFT upgrade is an add-on to its GPI system. GPI stands for global payments innovation, and it was launched in January 2017 to speed up the notoriously slow cross-border payment network, which has been the world standard since the 1970s. Harry Newman, SWIFT head of banking, told the Financial Times in June: “It is no secret that correspondent banking is a 1998 model and we are busy addressing that, bringing it to a 2018 model.” This system is already used by a large proportion of banks on the network.
The upgrade is a technical one, attaching a tracking reference to all transactions. It was announced in March 2018 and will be enacted on the 18th of November.
Finance Magnates reached out to SWIFT. A spokesperson for SWIFT (specifically,...