Ripple, also known by the symbol “XRP,” is putting its money where its mouth when it comes to investing in blockchain technology startups. Ripple is putting $25 million worth of XRP into a blockchain venture fund, a move that could increase adoption and use of XRP.
Ripple is investing in San Francisco-based Blockchain Capital. That company, founded in 2013, “is one of the oldest and most active venture investors in the blockchain technology sector, and has financed 72 companies, protocols and tokens since its inception. We are multi-stage investors and invest in both equity and crypto assets,” according to its website.
The $25 million contribution to Blockchain Capital was made in XRP, not dollars. Last month, Blockchain Capital announced the closing of Blockchain Capital IV, LP a $150 million fund. The company “has invested in 72 companies, protocols, and tokens, including Coinbase, Ripple, Circle, Ethereum, 0x and Kraken,” it said.
This is the first venture fund Ripple has contributed to and it is likely it will continue seeking related investments.
“We want smart people and smart entrepreneurs, who can solve a problem using Ripple,” Cory Johnson, chief market strategist at Ripple, told CNBC in an interview Wednesday. “There’s money sitting there to be used.”
More About Ripple
As of this writing Wednesday, XRP was the third-largest digital currency by market value behind bitcoin and ethereum. XRP traded at an all-time high of $3.84 in January but labored around 50 cents at this writing. Its market capitalization is $19.62 billion. The supply of XRP is capped at 100 billion, of which Ripple controls 60 billion.
Ripple uses a blockchain technology known as the “Enterprise Blockchain” ledger. XRP is used by some banks and other financial institutions, such as American Express and Western Union, and allows users to send, receive and hold any currency on a secure, decentralized network.
Ripple technology is more secure than those of rivals, including bitcoin and XRP transactions settle rapidly, in as little as four seconds.
PayPal’s crypto trading goes live in the US!
Customers will be able to trade up to $20,000 a week, rather than the originally announced $10,000.
On Thursday, PayPal’s crypto trading and payments went live for all eligible customers in the United States.
Per its updated announcement, PayPal ended its waitlist for customers looking to use cryptocurrency in the U.S. Trading features a limit of $20,000 per week, which is double the originally announced $10,000.
PayPal ultimately plans to make crypto payments available at 26 million merchants globally.
A representative said that PayPal will notify U.S. customers about the general availability of crypto services in the coming days.
Dan Schulman, CEO of PayPal, noted that the shift to supporting crypto was driven by what he sees as an “inevitable” drift toward virtual currencies.
“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly.”
Much-anticipated global services are expected to launch at the beginning of 2021, alongside crypto payments on Venmo. PayPal initially announced its plans to integrate crypto three weeks ago. The announcement led to a boost in BTC price.
As part of its crypto services, PayPal received the first conditional Bitlicense from the New York Department of Financial Services, one of the most hawkish sub-national financial regulators in the U.S. Many noted that the terms of PayPal’s crypto services would entail that coins bought on the platform would not be able to leave, likely as part of its compromise with regulators in bringing crypto services to such a wide user base.
PayPal Allows Bitcoin And Crypto Spending
PayPal has entered the cryptocurrency market, announcing that its customers will be able to buy and sell Bitcoin and other virtual currencies using their PayPal accounts.
Those virtual coins could then be used to buy things from the 26 million sellers which accept PayPal, it said.
PayPal plans to roll out buying options in the US over the next few weeks, with the full rollout due early next year.
Bitcoin prices rose alongside the news, breaking the $12,000 (£9,170) mark.
The other cryptocurrencies to be added first will be Ethereum, Litecoin, and Bitcoin Cash (a spin-off from Bitcoin).
All could be stored “directly within the PayPal digital wallet”, the company said.
Cryptocurrencies have remained a niche payment method, partly down to the rapid change in prices they can experience compared with traditional state-backed currencies. That has made them popular among some types of investors.
PayPal said it was aiming “to increase consumer understanding and adoption of cryptocurrency”.
“As part of this offering, PayPal will provide account holders with educational content to help them understand the cryptocurrency ecosystem,” it said.
But David Gerard, author of Attack of the 50 Foot Blockchain and the forthcoming Libra Shrugged: How Facebook Tried to Take Over the Money, said PayPal was describing “a crypto day-trading market”.
“I’m at a loss as to who the market is for PayPal as a crypto-exchange,” he said.
He likened it to playing the stock market, but with Bitcoin – whose volatile and less well-regulated nature was like “gambling on penny stocks”.
“Have a flutter, drop $10 on it, you’ll learn things you wouldn’t learn any other way – but you are gambling,” he warned.
He said there were “a lot of big players who manipulate the price”, and ordinary people risked losing their money.
“I don’t expect much of a market for this beyond existing crypto holders… I’m baffled that PayPal would offer this, and it’s not clear what they’re trying to do here,” he said.
“There must be someone at PayPal who is very interested in cryptocurrencies,” he added.
Paying with crypto
Other payment firms, such as Square’s Cash app and Revolut, have already offered cryptocurrencies for sale. But PayPal has one of the largest merchant networks in the world.
When it comes to using the virtual coins, PayPal will convert the cryptocurrency into the relevant national currency, so the company being paid will never receive the virtual coins – just the correct amount of pounds or dollars.
PayPal said the system meant there would be “certainty of value and no incremental fees”.
But using Bitcoin to pay at ordinary merchants is not due to launch until “early 2021”.
Cryptocurrencies’ volatile prices – along with their historical use as a less traceable payment method for illegal purposes – have led to numerous calls for them to be regulated.
PayPal has been granted permission for its operation from the New York State Department of Financial Services, in the form of a conditional “Bitlicence” – the first such licence granted.
To begin with, the service will work with an existing cryptocurrency provider in the US, the Paxos Trust Company.
But it is not PayPal’s first venture into the area.
The firm was once a partner in Facebook’s digital currency Libra, but became the first to pull out of the alliance, just a few months after it was announced.
The scheme was controversial, attracting attention from financial regulators in several countries.
Earlier this year, Facebook was reported to be “rethinking” the idea amid the resistance.
Litecoin Foundation & TokenPay strike a strategic partnership
TokenPay, The self-proclaimed “Bitcoin on steroids” has entered a partnership with the Litecoin Foundation for a 9.9% stake in the WEG Bank in Germany. In May 2018 TokenPay acquired just under 10% of WEG Bank with the option to purchase up to 90% if approved by the regulatory commission of Germany. In a move to leverage Litecoins marketing and technology service TokenPay has handed the 9.9% over to Litecoin in hopes that it will put TokenPay on the map as a major player in the cryptocurrency market.
TokenPay CEO Derek Capo said in a recent statement “We are building an entire ecosystem that includes merchant services, banking, escrow, gaming, e-sports, employment services, etc., where we have entire control of the vertical integration needed to lower costs, but also control our destiny. Litecoin is a top-five blockchain in the world, and boasts more than one million followers worldwide, which helps increase the chances of TokenPay’s ecosystem to succeed.”
What does this mean for TokenPay & Litecoin?
This partnership will provide TPAY access to LTC’s massive user base and will give the users the opportunity to buy, sell & trade as well as gain access to the company’s debit card service. In turn, Litecoin will benefit by having exclusive access to TokenPay’s long-standing bank connections to hopefully integrate the LTC blockchain network into a wide range of monetary associations.
Charlie Lee, CEO of the Litecoin Foundation responded to the partnership by saying “This partnership is a huge win-win for both Litecoin and TokenPay. I’m looking forward to integrating Litecoin with the WEG Bank AG and all the various services it has to offer, to make it simple for anyone to buy and use Litecoin.”
Each company will play a crucial roll in the partnership by focusing on TPAY crypto and its accompanying blockchain as well as the TokenPay multisignature transaction engine, which should accelerate payment and transaction speeds tremendously for both companies.
There is no word yet on exactly when the technology side will be implemented but TokenPay is geared up to make some major moves that include partnering with multiple other financial establishments.