Ripple CEO Brad Garlinghouse has stated that the XRP token was developed to solve the limitations associated with popular cryptocurrency Bitcoin (BTC).
Garlinghouse, who made this known in an interview held at the Economic Club of New York Forum today, said that the original developers of the XRP token were early Bitcoin developers, who tried to correct the scalability, Proof-of-Work (PoW) issues as predominant in Bitcoin.
The Economic Club of New York Forum was established in 1907 to tackle economic and socio-political issues. Since its inception, the forum has received more than a thousand guest speakers, with the Ripple boss being the latest guest speaker to be interviewed.
Speaking about Bitcoin’s PoW mining technique, Garlinghouse stated that the XRP developers figured out that the mining of Bitcoin causes slower transaction processing time and a high transaction fee.
These issues, according to Garlinghouse, made the developers of the XRP ledger adopt a consensus algorithm for the XRP token, where people do not have to possess high computing machines to process transactions.
Notably, Ripple currently possesses 55% of the XRP token, which is valued at $15 billion at the time of writing.
Garlinghouse said that the payment network does not intend to stir up a competition between fiat currencies and XRP. Instead, he stated that the Ripple network plans to facilitate faster cross-border settlements using the XRP token and eradicate the problems associated with the traditional banking system.
Also, during the interview, Garlinghouse dismissed the notion held by most financial regulators that cryptocurrencies, in general, are designed to replace fiat currencies, with emphasis on Facebook’s Libra project, which is currently faced with widespread scrutiny from global financial regulators.
He went further to back his comment with the widespread adoption of the Ripple payment service by over 200 financial institutions, including MoneyGram and Santander.
Ripple has indeed formed great alliances with notable financial institutions.
In June, Coinfomania reported that Ripple partnered with MoneyGram in a $50 million deal, which would see MoneyGram utilize Ripple’s products, including the XRP token in its day-to-day operation.