No Swell: Ripple Price Sinks as Conference Passes Without Bullish News for XRP

https://www.cryptocoinsnews.com/no-swell-ripple-price-sinks-conference-passes-without-bullish-news-xrp/

The ripple price plunged as Ripple’s much-anticipated fintech conference came and went without the major announcement that XRP investors were hoping for.

Two months ago, the ripple price spiked after Ripple previewed a major announcement. It quickly became clear that the announcement was conference-related, but investors let their imaginations run wild as the firm slowly revealed details over the ensuing days, and speculators began driving up demand for XRP — the native currency of the Ripple Consensus Ledger (RCL).

Specifically, they believed that the conference would be hosted in Asia and would be accompanied by an announcement of a partnership with an Asian bank, corporate giant, or even government. When neither of these materialized, the ripple price plunged.

A similar phenomenon occurred this week.

From October 16-18, Ripple hosted “Swell: The Future Is Here” in Toronto. Once again, investors anticipated that bullish news for XRP would break at the conference, and the ripple price rose as high as $0.291 on Monday.

Investors watched the conference live stream with bated breath, but, once again, they saw no significant XRP-related news. And while the Bill & Melinda Gates Foundation did announce that Ripple was one of several fintech companies that had collaborated to develop Mojaloop, an open-source application intended to help the world’s unbanked population access basic financial services, the announcement did not have any direct bearing on XRP.

Consequently, the ripple price quickly reversed course and ultimately sank as low as $0.208 on Thursday. This reduced its market cap to just $8.1 billion — a nearly $3 billion decrease since it briefly cracked the $11 billion threshold earlier in the week.

XRP has seen a slight bump to $0.217 in the past few hours following the release of Ripple’s quarterly XRP markets report — which teases the announcement of new partnerships and an “innovative approach” to use XRP to increase Ripple adoption — but the currency is still down about 15% for the week.

Manager of Ripple cryptocurrency exchange arrested for scam

Source: https://www.japantimes.co.jp/news/2017/10/18/national/crime-legal/manager-ripple-cryptocurrency-exchange-arrested-scam/#.WehWSztpFhH

A Japanese manager of an exchange for the Ripple cryptocurrency was arrested Wednesday for allegedly swindling ¥1.4 million ($12,470) from a depositor, police said.

It is the first arrest in Japan made in connection with a bourse of the Ripple virtual currency issued by a U.S. venture company, which is officially called XRP, according to investigators.

Yuki Takenaka, the 31-year-old founder and head of a company operating the Ripple exchange, is suspected of defrauding the male depositor in Miyagi Prefecture of the ¥1.4 million in March 2015. He allegedly collected the money even though his firm was in a state of collapse and unable to make refunds at that time.

Takenaka, a Kyoto resident, has admitted to most of the charges, according to the police.

The currency exchange was set up by Takenaka in Hamamatsu, Shizuoka Prefecture, in May 2014, but users were unable to withdraw cash or contact him around March the following year.

His company collected money from its users in exchange for IOUs, or written acknowledgements of debt, needed for Ripple online transactions. Users could exchange the notes with Ripple or convert them into cash.

According to investigative sources, Takenaka allegedly swindled more than ¥10 million out of a dozen users by advertising that his company charges no commission.

He is also suspected of issuing fictitious IOUs worth around ¥120 million and making profits. The police will search Takenaka’s home and other places in Hamamatsu.

As of Monday, Ripple’s market capitalization stood at more than ¥1 trillion following bitcoin at over ¥10 trillion and Ethereum at over ¥3 trillion.

The Ripple currency is usually used for international payments and cannot be used for merchandise purchases. It has been traded online mainly for speculation purposes.

Source: https://www.japantimes.co.jp/news/2017/10/18/national/crime-legal/manager-ripple-cryptocurrency-exchange-arrested-scam/#.WehWSztpFhH

51szzc.com is the 3rd China Exchange to stop trading on 29 Sep.

Official announcement: https://www.51szzc.com/service/article.html?id=430

51szzc.com is the 3rd China Exchange to stop trading on 29 Sep

Official announcement: https://www.51szzc.com/service/article.html?id=430

Source: https://publication.widmerdun.com/how-ripple-could-succeed-but-xrp-be-worth-nothing-4c2c5152d184

How Ripple could succeed but XRP be worth nothing - Correspondent banking, disruption and confusing offerings.

Ripple is probably one of the most misunderstood Blockchain companies out there. This is partly due to the company’s confusing set of offerings and the pivots they have undergone[1]. Add that to the fact that international banking is complex, and you have a situation ripe for confusion. To really understand what Ripple does we need to take a quick look at its history and the problem it is trying to solve.

Ripple (officially Ripple Labs) was founded in 2012 and now has over 150 employees. Since then it has raised over $90 million dollars from investors including Andreeson Horrowitz and Google Ventures.

Ripple’s initial vision was to build a ‘better Bitcoin’ — focussed on banking — with over 1,000 transactions per second and a short block time (time to confirm transactions). This resulted in XRP. Ripple was also developing what can be described as “SWIFT 2.0”. You’ve probably heard of SWIFT in the context of a SWIFT bank transfer. We’re going to dig through how those two things fit together and why it matters. But first, we’re going to have to look at how money moves through the banking system.

Bank Transfers Within a Country

When we want to send money across banks, we are saying that we want one bank’s balance to go up and the other’s to go down. We want this to happen in a verifiable way. Luckily, all banks in a country hold an account with the Central Bank. This is a trustable third party. If JPMorgan Chase wants to send money to Wells Fargo they can use the fact that they both hold an account with the Federal Reserve. JPMorgan Chase messages the Federal Reserve to tell them how much they want to transfer and the Federal reserve simply deducts that amount from their account and adds it to Wells Fargo’s. Money has moved. This is called a real-time gross settlement system. In the US this system is called Fedwire. It’s instantaneous but expensive.

If we didn’t need the transfer to happen in real time, another option would have been to collect all the transfers that happened in a day and then settle the net amounts with the Federal Reserve at the end of the day. This is known as a deferred net settlement system. An example is the ACH (American Clearing House). Most countries have variations on both of these systems[2].

International Bank Transfers

A challenge arrives when we try to do an international transfer. Let’s say Barclays in England wants to send money to RBC in Canada. Unfortunately, they both don’t share an account at the same Central Bank, so they cannot just transfer funds. What they use is a sort of trick. Barclays holds an account with RBC and vice versa. Each has a certain balance in it, and basically shows how much money each bank owes each other. These can be thought of as IOU’s or promises. When funds need to be transferred the banks can just adjust the numbers in these accounts accordingly. In practice these changes are not made in real time, but are settled at some interval decided by the banks. The banks must also decide on exchange rates and bank fees (sometimes called the bene deduct fees).

Now, RBC and Barclays are both large banks and they hold correspondent accounts (also called nostro and vostro accounts) with each other. But suppose we wanted to send money, from Small Bank A in England, to Small Bank B in Canada. These banks don’t have correspondent relations with oversees banks. What they need to do is execute their transfer through larger banks such as RBC and Barclays. Here’s how the steps might look:

    Small Bank A would use CHAPS (a deferred net settlement system of England) to send money to Barclays.
    Barclays initiates an ‘international transfer’, through its correspondent bank in Canada, by sending them a SWIFT message. RBC then debits the account Barclays holds with them.
    RBC uses ACSS (a deferred net settlement system of Canada) to send money to Small Bank B.

The above process would likely take 4 days to complete. In some cases there can even be more than two correspondent banks. Note that in the ‘cross border’ step, money doesn’t actually move. This step is also structured around whatever agreement the two banks have come to. This includes fees, FX rates and settlement times. Remember this, as it will be important for later.

SWIFT

So how does SWIFT come into all of this? SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication. They are a cooperative that run the SWIFT network. The SWIFT network allows banks to securely send electronic messages to one another. It’s a standardized way for Bank A to tell Bank B that they want to send x amount, from Alice’s account in Bank A, to Bob’s account in Bank B. Think of it as the language that all banks can understand. Once a bank receives a SWIFT message, it can start the process described above. Note that the SWIFT message does not send any funds, it is only an instruction[3].

SWIFT charges banks to use the network and also sells them software. The SWIFT system, however, is fairly antiquated. This year a security vulnerability resulted in over $81 million stolen because of fraudulent SWIFT messages. It’s a system ripe for disruption. So let’s look at how Ripple is competing with SWIFT.

Ripple and xCurrent

Ripple’s answer to SWIFT is xCurrent[4]. Think of it as a more modern and efficient SWIFT. Banks using xCurrent opt into the Inter Ledger Protocol (ILP), this integrates with banks current ledgers and keeps track of the credits, debits and liquidity across all parties, in real time.

The advantages of xCurrent come from the fast, two way communication protocol. Instead of a one way SWIFT message banks can now share information like fees, FX rates, risk information and KYC (know your customer) information. This two way information sharing means the network can find the best path for a transaction. The increased transparency should result in lower fees and more reliable transfers. Banks can now get a good estimate of the total cost, and path, of a transfer before it occurs. This was not possible in the old system. Transfers can also be tracked at any stage.

Another large cost savings supposedly occurs because the cross-border part of the money transfer is now instantaneous, instead of two days. When banks have correspondent accounts with each other they have to lock up capital to prove that they have the liquid assets to make the ‘transfer’. This idle capital is known as the liquidity cost and is a negative for banks as there is an opportunity cost to having money sitting there doing nothing. The supposed savings using Ripple (xCurrent) are shown below.

One big catch with xCurrent is that all banks need to have opted into it in order to communicate with each other. Network effects are important.

You may have noticed that XRP is not mentioned at all here. That’s because xCurrent doesn’t use XRP. In fact, when you hear about banks adopting Ripple, what they’re really trying out is xCurrent (in fact Ripple and xCurrent are sometimes used interchangeably). So how does XRP fit into this then?

What about XRP?

XRP is the idealized solution to money transfer problems. Wouldn’t it be easier if instead of holding correspondent accounts in multiple banks and currencies around the world, banks could just hold XRP themselves and use it to make international transfers[5]? XRP would be a globally accepted currency that could be sent instantly anywhere in the world. Ripple calls this service xRapid, and there’s surprisingly little information about it available from Ripple.

XRP and xRapid would integrate with xCurrent to bring large savings and efficiencies to banks. Banks would no longer need correspondent accounts and could just settle by sending XRP. This would completely turn the current system on its head. The supposed cost savings are shown below.

The path to XRP becoming the universal bridging asset, as described above, is not a simple one. It depends on a couple of key assumptions, liquidity and stability.

Banks don’t want to just hold their XRP, or that would be no better than the old system, where capital was lying idle. The cost savings depend on the ability of banks to find liquidity. That means, if a bank in India receives XRP and they want to be able to trade it for Rupees they should be able to do that on an exchange. Banks also want the price of XRP to be relatively stable, or the risks during transfers would be too high. For XRP to be stable there has to be some price the market settles on for one XRP. This is determined by the demand and supply of the asset.

As we have seen above, banks don’t really want to hold XRP. It is not an investment, but a settlement mechanism. Because of this it doesn’t matter to them if one XRP is worth 5 cents or 5 dollars. Banks want to buy it, send it and then the receiver wants to convert it into a government currency. But who is on the other side of the order book? According to Ripple there will be Market Makers on the other side who are incentivized by profits from trading XRP and currency pairs. The details of how this would work are vague at best.

So, how does the price of one XRP get determined? Right now it is determined by speculators on crypto exchanges. In the long term speculation cannot be the driver of value of XRP. XRP could derive value from people’s beliefs, in the same way as Bitcoin, however, this is unlikely as Ripple’s customers, the banks, are unlikely to be motivated by beliefs and ideals.

The last way XRP could derive value is from the cost savings it provides to banks. Say banks could save $10 trillion a year by using XRP, this would create an underlying demand for XRP that would determine its price. Unfortunately the cost savings provided by XRP are not very high when compared to the risks of adopting it. In the best case scenario XRP would save banks an additional 33% over xCurrent. XRP cannot just be marginally better, but must be an entire league above the existing system in order for banks to adopt it. Would banks really want to take the risk of investing in a new digital currency for what is likely an extra 15% of savings?

If XRP were the status quo, it would certainly have some stable value as all business would be done in XRP. However, it faces a huge energetic barrier in getting to that position, and realizing network effects. It is going to be very difficult for XRP to overcome the current system and become a universal bridging asset. Creating a global currency that is not backed by a state is not easy.

Next Steps

Ripple has had some success with banks adopting xCurrent, with over 75 banks deploying Ripple. Ripple may very well succeed as a company and disrupt SWIFT, but that does not necessarily mean that the XRP currency will succeed as well. In fact, the company may have to pivot away from that old business model. In this scenario XRP is like an unwanted creation, which Ripple and crypto investors will have to deal with.

Source: https://publication.widmerdun.com/how-ripple-could-succeed-but-xrp-be-worth-nothing-4c2c5152d184

OKCoin and Huobi are meeting with regulators tomorrow. They might soon change their tune.

Source: https://twitter.com/SatoshiLite/status/908375715279597570

Market is recovering now? Maybe not. Becareful of tomorrow The Real BTC Dump. Time to buy xrp below 0.15.

OKCoin and Huobi are meeting with regulators tomorrow. They might soon change their tune.

https://twitter.com/SatoshiLite/status/908375715279597570

Market is recovering now? Maybe not. Becareful of tomorrow The Real BTC Dump.

JFYI

BTCChina Exchange will stop all trading on 09/30

After carefully considering the announcement published by Chinese regulators on 09/04, BTCChina Exchange will stop all trading on 09/30.

https://twitter.com/YourBTCC/status/908285586368167936

BTCChina Exchange will stop all trading on 09/30

After carefully considering the announcement published by Chinese regulators on 09/04, BTCChina Exchange will stop all trading on 09/30.

https://twitter.com/YourBTCC/status/908285586368167936

http://news.8btc.com/li-xiaolai-yunbi-is-winding-down-in-3-months

Li Xiaolai: Yunbi Is Winding Down In 3 Months

A Shenzhen-based exchange has delisted BTC and ETH trading pairs against CNY. The exchange is the second one. The latest report of Caixin Weekly this afternoon also revealed that “Yunbi is winding down in 3 months” according to Li Xiaolai, the Bitcoin tycoon in China.

Zhgtrade, a Shenzhen-based altcoin exchange, announced that the exchange would delist BTC/CNY and ETH/CNY trade pairs on 10 September. In addition, the statement said:

    “As per the regulatory requirement, Zhgtrade will stop most trading pairs gradually. Please withdraw your CNY and digital assets.”

Prior to the statement, the exchange, which was founded in 2015, has also suspended new user registration and CNY deposit on 9 September .
This is the 2nd exchange that basically shut down  operation. The first one is guojiaowang, one of the six Beijing-based exchanges. These two exchanges are more or less involved in the “ICO” frenzy in China.
In fact, most exchanges and ICO platform announced refunding procedures for “ICO” coins after delisting of ICO-ed coins.
So far, Huobi, OKCoin, Btc38 and Viabtc are the exchanges that are not connected with “ICO” coins. But that doesn’t provide them shelter from regulatory storm.

In response to a report from Caixin, Huobi, OKCoin and BTCChina release almost identical reponses. Take BTCC’s reply for example:

    1. So far, we haven’t received order from regulatory authorities and not in a position to confirm the authenticity of the news.
    2. As a company based in China, BTCC’s basic principle is to comply with local regulatory policy. If the report is true, we will firmly support the policy and protect the customer’s asset security.
    3. The report mentions that Bitcoin is not considered as illegal by the authority and p2p trading between users are not banned. If the report is true, BTCC will stop current BTC/CNY trading and transform into a p2p trading platform for digital assets.

The response leaves a opening for transforming into an OTC exchange, which is specifically mentioned as “not restricted” by regulatory report.

But the danger of total shutdown is looming until later this afternoon. According to the latest  report by Caixin, Li Xiaolai, who owns 25% share of Yunbi, told Caixin reporter that:

    “Yunbi is winding down in 3 months”

With the ride of ICO, Yunbi once took the first place in terms of trading volume in the world. If Yunbi and other exchanges are to shut down, CNY liquidity supply is bound to shrink. Although BTC trading might still be conducted via localbitcoins,  OTC exchange for ERC-20 tokens is still absent in the market.

It an official announcement from YuanBao. I have posted the link https://www.yuanbao.com/news/detail/?id=1576. Use a translator to read it.

They are going to stop trading NEO and asked the user to transfer NEO to their own wallet or other exchange, no transaction fee for withdrawal.

Yuanbao exchange delisted NEO (2017-09-09 23:58 Beijing Time) Just happened an hour ago.

https://www.yuanbao.com/news/detail/?id=1576

This link has the latest development of China's cryptocurrency ICO and Exchanges crackdown: https://www.reddit.com/r/NEO/comments/6z21dk/china_the_middle_kingdom_of_fud/

Follow to keep yourself posted.

Below was copied from above link and credit goes to https://www.reddit.com/user/AlexiosI

***************

I'm posting this as a Clearinghouse of information over the new China FUD. There are very real concerns regarding the press reports coming out and a ton of uncertainty, so the point of this thread is to definitively get to the bottom of this news. If you are a Chinese national or Fluent Mandarin speaker familiar with Chinese crypto news, we badly need your input on what is going on with the current uncertainty over Crypto exchanges in China. If you clicked on this to simply shill from the mountaintops for NEO, please go elsewhere. We get there are many people invested in the currency on this subreddit and you believe in it. But this is a place for reasoned, sourced discussion...not feelings and emotion.

There has been a swarm of difficult to understand, poorly sourced and often contradictory information over the past 24 hours regarding Chinese government policy toward Cryptocurrency exchanges. It all started with this difficult to translate article posted on Caixin:

http://finance.caixin.com/2017-09-08/101142797.html

I don't speak Mandarin even close to fluently and the Google translation of the article leaves an enormous amount to be desired in terms of actual comprehension. Still there are a number of alarming statements in the article regarding the Chinese exchanges.

The Western media has divided into the predictable camps over the report. Mainstream media outlets like Reuters, CNBC and Bloomberg ran scary, toldjaso headlines reinforcing their typical coverage of crypto as a volatile fad the kids are into. Although still admitting that the story was just based on the Caixin report.

The more mainline crypto blogs like Coindesk, Coin Telegraph etc stressed their uncertainty as to the meaning of the news and how it was not confirmed by anything other than the Caixin article at this point.

The user generated boards have been screaming that it is Fake News and a false story. However the markets remain in limbo. They have not crashed to the point that the loss of Chinese volume would seem to precipitate, but they have yet to regain the loss from the initial report. This is particularly true for NEO. So FUD reigns supreme at the moment.

As for the exchanges:

Binance has posted it will stop trading for Chinese IP addresses entirely. Not a good sign. https://binance.zendesk.com/hc/en-us/articles/115001444731-Binance-Update-2017-09-06 However this news came out on September 6, not yesterday.

Jubi similarly had delisted NEO (Antshares still on its exchange) before the reports broke. Jubi was charging 1 Full NEO to withdraw the currency from the Exchange, so I don't know who in their right mind would buy on there anyways.

OKCoin has nothing about the domestic ban on their website. But did post this odd warning which is irrelevant to the discussion but kinda funny "We have implemented additional compliance and sanction controls. We are sorry to inform you that we are unable to service as you may be from the following countries: North Korea, Syria, Iran, Sudan, Bangladesh, Bolivia, Ecuador, Kyrgyzstan and the USA. If you feel that we have miscategorized you, please contact our 24/7 customer service representatives. OKEx Team"

Huobi currently has nothing about the FUD in its site.

Yuanbao has put a "Risk Warning" on their website, which translated from Chinese reads: "risk warning Digital currency transactions have a high risk (pre-dug, soaring, bankruptcy, bankruptcy, team disbanded, technical defects, etc.), according to the five ministries "on the prevention of bit currency risk notice", ingot only for digital money lovers A free online exchange platform, the value of the investment value of the currency does not bear any review, guarantee, compensation liability, if you can not accept, please do not trade! Thank you!"

This story is obviously developing over the weekend. Please add thoughtful, sourced content and opinions to the thread so we can try to figure out what is actually going on.

**********************

Most important reply as at 9Sep2017:

AreWeOkay: Tencent has also confirmed the news about CYN.
https://translate.google.com/translate?hl=en&sl=zh-CN&u=https://view.inews.qq.com/a/FIN2017090808516703%3Ffrom%3Dsinglemessage%26isappinstalled%3D0&prev=search

TenX will be delisted from Yunbi.com

https://twitter.com/yunbicom/status/905417001287335936

OMG will be delisted from Yunbi.com

https://twitter.com/yunbicom/status/905417001287335936

QTUM will be delisted from Yunbi.com

https://twitter.com/yunbicom/status/905417001287335936

NEO will be delisted from Yunbi.com

https://twitter.com/yunbicom/status/905417001287335936

Executive Summary from Multicoin Capital

Ripple is a blockchain protocol for inter-bank settlements. Unlike many other blockchains, Ripple is designed to work with existing institutions to facilitate the ability to quickly transact any asset globally. While the Ripple protocol has a native currency, XRP, this cryptocurrency is only required to pay transaction fees on the Ripple network. It can be used in other instances, but banks have the option to transact IOUs in any asset, including USD, EUR, and other fiat currencies, directly on the Ripple network. Ripple is primarily designed as a back-end infrastructure tool that facilitates decentralized exchange of assets between banks.

The Ripple protocol is designed and maintained by Ripple Inc., a California-based C-corporation that’s raised over $93 million in venture capital. Ripple Inc. currently holds the vast majority of XRP tokens and also maintains a great deal of control over the network, though it has outlined plans to democratize control in the future. Both of these are major risks.

We recognize that the Ripple protocol has an opportunity to displace legacy inter-bank networks, but we must distinguish between a good use for a blockchain and a good investment opportunity. We believe that the Ripple protocol satisfies the former, but that XRP does not satisfy the latter. The Ripple protocol can impact trillions of dollars of economic activity, but this commerce is unlikely to be conducted in XRP. The XRP token has little core utility beyond fee payment and is unlikely to grow in value proportional to Ripple network usage.  

Ripple Protocol Value Proposition

The Ripple network replaces the existing inter-bank exchange network with a blockchain– eliminating friction, speeding up transaction and settlement times, and greatly reducing costs. In many ways, this is a perfect use case for blockchain technology. The legacy system is slow, expensive, and error-prone; banks must coordinate transfers of value across different internal databases, making it extremely difficult to settle transactions quickly. Not only is this process slow, it adversely impacts a bank’s working capital. Banks often have to open accounts with other foreign banks and fund them with local currency (these are known as nostro accounts). This money sits idle until banks need to make a payment in that currency, creating working capital inefficiencies. Banks that can’t afford to fund many nostro accounts, or that need to make a payment in a currency for which they don’t have an account, must rely on third-party liquidity providers for that currency. Not only does this subject the banks to counterparty risk, it often requires that their capital be tied up in transit for days at a time.

Ripple allows banks to move from a system of disjointed databases to a single distributed global database, the Ripple ledger. Banks can trade IOUs for any asset with other banks that they trust, and all of the transactions are contained on a shared ledger. This gives transactions a fluidity and speed that can’t be achieved in the legacy system, and it greatly frees up working capital for banks. This solves a huge problem for financial institutions.

XRP Utility

Transaction fees must be paid in XRP, and accounts must have a minimum of 20 XRP (about $4 USD at time of publication) in their wallets in order to transact on the network. These mechanisms are designed to prevent network spam. Additionally, transaction fees are burned (they are not paid to validators), making XRP a deflationary currency. Finally, XRP can be used as a “bridge currency” for instant transactions on the Ripple network. In these instances, XRP functions much like any other blockchain-based cryptocurrency. Banks have the option to issue their own IOU-backed assets on the Ripple network, or they can send payments using XRP.

While the Ripple network allows for IOUs to be transacted quickly, globally, and on a single distributed database, these IOUs must be settled periodically with actual monetary transfers. If banks instead send payments using XRP, settlement can happen much more quickly than it does with legacy systems, as long as there is a party on each side of the transaction that is willing to either receive XRP or immediately exchange it for the preferred fiat currency. This is a major caveat, and the fundamental source of our bearishness on XRP.

XRP Risks

Cross-border settlement functionality is not inherent to XRP. Banks could just as easily use Bitcoin, Ether, DASH, or another cryptocurrency for the actual settlements. In the future, banks are most likely to conduct settlements in blockchain-based fiats or whichever cryptocurrency becomes the global reserve. We don’t believe that having a currency specifically for inter-bank settlements is a compelling, and is in fact counterproductive because it introduces unnecessary exchange risk. Banks will want to settle IOUs with widely accepted and stable global reserve cryptocurrencies. Ripple Inc. has not presented a plan for XRP to fulfill this mission.

In its current form, Ripple also faces significant centralization risk because of Ripple Inc.’s control of network servers and its ownership of the majority of XRP. Furthermore, multiple researchers have expressed uncertainty over the security of Ripple’s native consensus algorithm. These concerns and risks are detailed in our full analysis.

Conclusion

XRP currently has a network value of about $8.5 billion, excluding the 62 billion XRP that are owned by Ripple, Inc. We believe that most of this value is a result of speculation due to major partnership and customer announcements by Ripple, Inc. The company has made major progress on several fronts and continues to sign important partnerships with banks and other financial institutions around the world. We recognize the value in the service that Ripple Inc. is providing, and we believe that inter-bank settlements are one of the best use cases for blockchain technology.

However, it is important to recognize that a good use of blockchain technology does not always justify the value of a chain’s native token. In the case of XRP, we believe that the token holds little utility beyond payment of negligible fees, and thus is unlikely to maintain and build value in the long term. While we expect that XRP tokens will continue to see price spikes as Ripple Inc. makes announcements, we don’t believe that the fundamentals of the protocol will build sustained value for XRP. An investment in XRP is not an investment in Ripple Inc. The company may do well offering a useful service to banks, but XRP’s value is likely limited. For these reasons, we are bearish on XRP at current prices.

Source: https://multicoin.capital/2017/08/31/xrp2017/

Six of the world's biggest banks: Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street are teaming up with UBS for a digital currency project called "utility settlement coin," it's an idea that's been around since 2015, but it's now moving into a new phase of development. They are in discussions with central banks and regulators. Work on the next phase of the project — the last before a live implementation — will include six members revealed today, Barclays, CIBC, Credit Suisse, HSBC, MUFG and State Street, building alongside founding financial institutions UBS, BNY Mellon, Deutsche Bank, Santander, NEX and blockchain startup Clearmatics.

Source 1: https://www.coindesk.com/hsbc-barclays-join-utility-settlement-coin-as-bank-blockchain-test-enters-final-phase/

Source 2: https://finance.yahoo.com/news/six-big-banks-join-blockchain-081514305.html

Source 3: http://www.nasdaq.com/article/six-big-banks-join-blockchain-digital-cash-settlement-project-20170831-00157

Existing Ripple clients: UBS, MUFG and CIBC might be dropping out (from Ripple) anytime after the announcement.

Bank of America Merrill Lynch dropped out could be related to this https://bravenewcoin.com/news/bank-of-america-merrill-lynch-hsbc-and-ida-develop-a-blockchain-prototype-solution-for-trade-finance/. They are no longer Ripple user but remains as Advisor only.