Pseudonymous tech researcher SMQKE recently caused a stir in the cryptocurrency community with a recent tweet highlighting a slide from a BNP Paribas presentation that classified Ripple and Stellar as “open protocols for institutions.”
This classification has reignited the debate about the target audience for these blockchain networks and their associated cryptocurrencies, XRP and XLM.
While SMQKE suggests that retail investors were “lucky enough” to gain access to XRP and XLM, a closer look reveals a more nuanced picture.
Ripple and Stellar were designed to address inefficiencies in the global financial system, particularly regarding cross-border payments. Traditional methods can be slow, expensive, and lack transparency. Ripple and Stellar offer faster transaction speeds, lower fees, and real-time settlement through distributed ledger technology.
Ripple’s Institutional Focus
Ripple has a clear focus on collaborating with financial institutions. It offers a suite of products, including RippleNet, a global network that connects banks and payment providers. RippleNet leverages XRP, the native token of the Ripple network, to facilitate faster and more cost-effective international payments.
Ripple Labs, the company behind Ripple, actively targets financial institutions and partners with them to integrate RippleNet into their existing infrastructure.
Stellar’s Broader Reach
While Stellar also boasts partnerships with financial institutions like MoneyGram, it takes a more open-source approach. The Stellar Development Foundation, a non-profit organization, stewards the network. Stellar Lumens (XLM) is the native token used for transactions on the Stellar network.
Unlike Ripple, Stellar isn’t limited to financial institutions. Individuals and businesses can use it for various purposes, including cross-border payments, micropayments, and asset issuance.
Retail Investor Participation
SMQKE’s suggestion that retail investors were fortunate to access XRP and XLM is debatable. It might imply these tokens were never meant for retail investors but reserved for financial institutions only.
Both XRP and XLM are listed on major cryptocurrency exchanges, allowing anyone to buy, sell, and trade them. However, the long-term value proposition for retail investors depends on the future adoption of these protocols.
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Beyond Institutions
The tweet simplifies the potential use cases for Ripple and Stellar. While both networks offer solutions for institutions, they hold promise for broader applications. For example, Stellar’s focus on financial inclusion could benefit the unbanked population by enabling faster and cheaper remittance services.
While Ripple’s current focus and partnerships lie with institutions, Stellar offers a more open platform with wider potential applications. Retail investors can participate in the XRP and XLM markets, but the success of their investments hinges on the overall adoption and future utility of these protocols within the broader financial landscape.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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