Coinbase announced its new cross-border cryptocurrency payment platform that is to use XRP and USDC which will be converted to supported local currencies. This has raised a lot of questions as to why Coinbase decided to work with XRP and not the leading cryptocurrency, Bitcoin (BTC).
Could it be that XRP is better than Bitcoin that is why it was chosen or as some people have alleged in the past, did Ripple pay for Coinbase to choose its native crypto token? I think the answer is simpler than most people think and No!, Ripple did not pay Coinbase to favor XRP.
One thing is certain and it is that cryptocurrencies are evolving specializations. What I mean is every cryptocurrency is working to provide services in a particular area of need to make the world a better place. It is no longer news that Ripple (XRP) has chosen remittance services as its niche, so Coinbase using it as its cross-border payment token shouldn’t be a surprise.
Weiss Ratings which isn’t the best of Ripple’s fans once said Ripple is superior in speed and quality of remittance services and no one can take that from the company. That was an indication that indeed XRP has established an identity in the industry that is difficult to deny.
Ripple provides one of the fastest remittance services at such a small cost that is almost unnoticeable. This makes it the preferred platform for payments, unlike Bitcoin that costs significantly more and takes much longer to settle payments.
Bitcoin takes 10 minutes to mine a block which is a long time for a merchant to wait either to receive or send funds. Although this is not to say Bitcoin is worthless, far from it. In fact, Tron CEO Justin Sun in an interview with CNBC earlier this year said Bitcoin is an excellent investment, adding that the layer 2 protocol of Bitcoin is what drives the internet revolution. Sun is not a known proponent of any crypto project apart from Tron and recently BTT, so his position on Bitcoin is a sincere opinion.
Bitcoin recently received an ‘A’ rating alongside Ripple’s XRP based on Weiss rating ranking, but for different strengths, while XRP got an ‘A’ for efficient cross-border payments, Bitcoin got an ‘A’ as a store of value. Like I mentioned earlier, all the cryptocurrencies have their strengths and one is not more important than another.
Therefore Coinbase’s choice of XRP is not an indication that it is superior to Bitcoin or that “it is the standard”, but rather because payments are its strong suit and it should be used in that area to make life better which is the goal of the blockchain technology.