XRP, a cryptocurrency used by Ripple in its payment network, rose to a five-week high on Wednesday after the company said it is targeting the $1.8 billion Philippine remittance corridor.
The cryptocurrency changed hands for $0.74 during European hours, hitting its highest level since June 21 and representing a 13% gain on the day, according to CoinDesk 20 data.
Buyers stepped in about $0.65 after that Ripple announced that Japanese money transfer provider SBI Remit, Philippine mobile payment service Coins.ph and crypto exchange SBI VC Trade have teamed up to transport remittance payments from Japan to the Philippines using Ripple’s on-demand liquidity (ODL) service.
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Filipinos in Japan send nearly $2 billion to their home country every year. According to Ripple, it is a costly affair as Japan has one of the highest remittance fees in the world. “It’s almost twice the average of all G-8 countries,” Wrinkle noticed.
ODL uses Ripple’s xRapid cross-border payment service and allows customers to transfer money using XRP, making transactions relatively faster and cheaper.
“This is the first from Ripple Liquidity on demand (ODL) service deployment in Japan, paving the way to drive greater adoption of crypto-enabled services in the region,” Ripple said. “By leveraging the digital asset XRP to eliminate pre-financing, the two companies can also free up capital and accelerate the expansion of their own payment businesses.”
The news follows a protracted battle between Ripple and the US Securities and Exchange Commission (SEC) that weighed heavily on XRP late last year.
In December, the SEC filed a suit against Ripple for raising $1.3 billion by selling XRP in unregistered securities offerings. XRP fell 67% to $0.21 in December before rising to $1.9 in April this year amid the market’s broader bull frenzy. However, when? bitcoin took a big hit in May, which also punctured the bull run in XRP and other currencies. XRP recently hit a low near $0.50.
Bitcoin is trading above $40,000 at the time of writing, up 1.72% on the day. Sentiment has recently been flipped in favor of the bulls, and some investors have been record calls, or bullish bets, awaiting continued upside potential. Bigger gains could be on the horizon as the Federal Reserve (Fed) is unlikely to amplify concerns about an early winding down or winding down of its stimulus program later today.
“Policymakers will likely continue to warn about the recent surge in US inflation, which jumped to new multi-year highs last month,” said Matt Ryan, a senior market analyst at Ebury. “However, the committee is also likely to point to the downside risks to growth from the latest wave of virus infections caused by the aggressive spread of the delta variant.”
Ryan does not foresee a formal announcement about QE winding down until the September meeting, when new macroeconomic and interest rate forecasts will be released. Bitcoin is likely to face selling pressures as the Fed’s monetary policy statement hints at an early winding down.