Cryptocurrency platform Ripple announced that it plans to invest in companies that are developing innovative uses for Ripple’s XRP cryptocurrency, which is the third most popular digital currency in the world based on market capitalization, trailing only bitcoin and Ether.
In December of last year, and through to early January of this year, XRP enjoyed the same kind of surge that briefly saw bitcoin reach $20,000 per coin. XRP then reached a peak of nearly $130 billion in market value, but it has since lost almost $100 billion of it. Many have criticized the cryptocurrency for its lack of practical applications, in spite of being designed specifically for banking applications. So far, its only customers have been a few cross-border payment systems.
Brad Garlinghouse, who is the CEO of Ripple, said during Money2020 in Singapore that, while the platform will continue to focus on banking applications, they are also looking for companies that offer products and services that present alternative uses of XRP. One company in particular Garlinghouse mentioned was a San Fransisco-based firm called Omni, which offers rental services and storage. Garlinghouse said that he and a few other Ripple executives invested $25 million in Omni this past January. He further said that Omni has since agreed to begin using XRP, and there will be more companies like them in the future.
Ripple is not the only cryptocurrency platform looking to invest in companies that use its currency. According to reports, a half-dozen cryptocurrency platforms are looking to use funds they have raised through initial coin offerings (ICOs) to invest in companies that can advance the use of their platforms’ currency. What’s more, a collection of blockchain-based companies have recently launched a $100 million fund, which will invest in both profit and non-profit cryptocurrency ventures.
At Money2020, Garlinghouse was also asked why banks were not adopting applications for Ripple. He said that he believes the cryptocurrency industry right now is similar to how the VoIP industry was years ago in its nascent stage, when he ran a company called DialPad, which Yahoo! subsequently acquired. He said, like with VoIP, people will eventually see the value of cryptocurrencies and blockchain technology, and that this will include the banking industry.