On the 27th September, Ripple’s investments arm Xpring announced its acquihire of payments startup Logos. Logos focuses on fast and scalable digital payments, and will now work with Ripple to build a blockchain-based financial system with XRP as its principal asset.
Ripple launched Xpring to support its long-term goal of creating the Internet of Value (IoV). Like the Internet of Things (IoT), the IoV is Ripple’s definition of a new, peer-to-peer ecosystem for exchanging assets without intermediaries. It hopes to leverage blockchain and cryptocurrency to enable instant trading of value.
Friday’s deal with Logos, as a decentralized finance (DeFi) startup, is a fitting acquisition for Xpring. It also signifies a new direction for Ripple in expanding its offerings. Logos’s founder and CEO, Michael Zochowski, will now head up Xpring’s DeFi Products department. His team will work on payments and finance initiatives for the firm.
Ripple has two separate solutions. It has RippleNet, its cryptographically secure payment messaging solution. A few leading banks, including Faysal, Santander, and PNC, have started to adopt this as an alternative to SWIFT.
The second solution is the use of XRP to make payments, called a “liquidity” solution when talking to banks. With XRP, a payment can avoid the need for lots of foreign bank accounts as well as the slow and costly correspondent banking network.
But big banks already have accounts, sometimes even branches, in all the major jurisdictions, so XRP isn’t such a big draw there. However, XRP has some appeal for money transfer companies which struggle to set up foreign bank accounts. Challenger banks, too, could use the currency instead of taking the time to deploy and maintain numerous offshore accounts.
Now Ripple is diversifying its applications through Xpring. It’s encouraging the use of XRP for content payments by investing $260 million in the Coil content platform. With the latest acquihire of Logos, it’s expanding its DeFi reach. Xpring hasn’t yet revealed the value of its deal with the startup.
