Xago, a Cape Town-based Fintech firm, recently announced its custom-built crypto-exchange and ‘XRP Gateway’ based on the Ripple Ledger. The aim of the exchange is to build a new retail payment network using blockchain technology, one which would enable retailers to settle their payments faster and more efficiently using their existing hardware. The firm is also focusing on creating liquidity for XRP in every country they are expanding to.
Jurgen Kuhnel, CEO and Co-founder of Xago, recently spoke to a media outlet and discussed the decision to create an XRP-centered exchange, Bitcoin, and Xago’s intention to focus on the African market. During the interview, Kuhnel noted that the decision to develop an XRP-focused exchange was mainly because Bitcoin is not well suited for retail needs. He explained,
“We love Bitcoin and also love what Bitcoin stands for, but for retail payments Bitcoin in its current form is not suited to the task. The purpose of our exchange is to build liquidity for XRP in the countries we will be expanding to”
He noted that XRP with its low transaction fees and instant transaction confirmations aligned perfectly with Xago’s goal of making retail payments more efficient, adding that the decision was made only after positive feedback from the market.
The Xago platform would also make use of Unstructured Supplementary Service Data (USSD) to verify users and allow mobile payment services using mobile numbers and PIN codes. The mobile payment services are expected to be launched in early 2020 and would allow for cross-border payments, retail payments, and peer-to-peer payments as well.
Kuhnel also hinted that the mobile payment system could be utilized for uses beyond XRP payments. For the time being however, it will be XRP. He said,
“We are utilizing the XRPL and need XRP liquidity for our system to function, but do not see a future for XRP payments alone.”
Libra could pose a threat to fiat USD
Kuhnel also shared his thoughts on Facebook’s Libra cryptocurrency, stating that “Libra is great and it just showed governments and banks of the world how big the concept of cryptocurrency is.” He added, “With Facebook’s massive user base, Libra could skyrocket to become the stable currency of the world and become a competition to fiat USD.”
He also went on to claim that even if Libra is approved and becomes the global stablecoin, in terms of retail adoption and providing solutions, XRP would trump Libra in the long run. He explained,
“Each transaction burns around 0.000012XRP and therefore supply is continually getting diminished. Because Libra is backed by assets that will continually issue more and more coins as the demand increases and effectively keeping the coin at 1 dollar so to speak.
A truly borderless currency can’t be based on assets that sit within borders. Therefore, in my opinion, XRP would prove to be a better solution in the long run.”
Xago is planning to revamp the retail payments model with the help of blockchain technology and XRP ledger. The firm went live only a couple of weeks ago, but has planned business expansion to 5 other countries in the near future.