Over the course of 2020, a growing number of companies have begun leveraging Ripple’s remittance platform ODL, a platform that enables more efficient cross-border payments and transactions with the help of XRP. In fact, just recently, Ripple’s Australia corridor recorded an all-time high. However, akin to other businesses, the COVID-19 pandemic and its resulting uncertainty have had a toll on companies like Ripple as well.
During a recent virtual all-hands meeting, Ripple CEO Brad Garlinghouse provided insights into the company’s progress in 2020 and what impact the COVID-19 pandemic has had on the remittance and payments landscape. With the markets in recession and uncertainty looming, Garlinghouse noted that the present-day economic scenario is alarmingly similar to that of the 2008 financial crisis. He argued,
“The kind of debasement of currencies, when we saw in the global financial crisis, kind of 2008, 2010, depending on what time scale you want to use, you saw a lot of new deficit spending and the inflationary dynamics, and that was very positive for gold.”
Garlinghouse also highlighted how companies that deal with a primarily cash-centric business have taken a hit of 30-40 percent. However, companies that focus on digital transactions have seen a surge of 80-100 percent, he noted. While these disruptions may have been brought about by quite a few external triggers in 2020, Garlinghouse argued,
“I don’t think cash services are going to go away tomorrow. I think we’re going to see them diversify. And more will happen digitally and I generally think that’s good for us. I think you’re seeing central banks more than ever thinking about how digital assets could be used.”
Despite the disruptions caused by Coronavirus across the world, Garlinghouse went on to underline how Ripple was able to record significant growth between Q4 2019 and Q1 2020. He said,
“We saw an 80-85% increase in volume across the Ripple net between Q4 and Q1…Specific to our on-demand liquidity there was a 190% increase from Q4 to Q1. We saw some of our big customers in Thailand go live, and it’s driving a lot of volume. We ended up signing, 28 new production contracts in the quarter and so despite the dynamics of the pandemic, we were able to finish the quarter on a strong note.”
In fact, a few weeks ago, Ripple partner Moneygram’s COO Kamila Chytil had noted that digital payments rose year-on-year by close to 57 percent, with the month of April recording noticeably greater traction. As the pandemic continues, changes, particularly with regard to payments and remittances, are bound to happen, breeding newer testing grounds for companies like Ripple.