XRP as a Base Currency: DCEX Goes Where No Exchange Has Gone Before

DCEX, a San Francisco-based digital currency exchange, is planning to become the first marketplace to employ Ripple’s XRP as a ‘base currency,’ according to a Monday press release. The XRP base currency will be available both to retail and institutional investors.

XRP Base Currency

DCEX’s a crypto-to-crypto marketplace will rely Ripple’s XRP token to facilitate transactions. AlphaPoint, a blockchain company supporting the DCEX launch, says XRP was chosen for its fast transaction speed and low-cost settlement.

“XRP blockchain transactions typically settle in under four seconds, allowing for faster multi-exchange strategies and providing a speed advantage over other money movement options,” the press statement read.

A total of 15 cryptocurrencies can be quoted against XRP, including bitcoin, Ethereum, bitcoin cash, Litecoin and Zcash. According to the press release, DCEX plans to add support for Neo, Cardano and other digital assets in the near future.

The platform purports to offer lower transaction fees, increased liquidity and the ability to conduct high-frequency crypto trading. Through Ripple and proprietary blockchain technology, DCEX claims it will have a processing capacity of nearly one million transactions per second.

DCEX is registered with the Financial Crimes Enforcement Network (FINCEN) with plans to become fully regulated under the U.S. Securities and Exchange Commission (SEC).

Ripple Adoption Grows but Controversy Remains

Although XRP use cases are less common, Ripple’s underlying technology is being piloted by hundreds of companies spanning the banking and international payments arena. Some of the big name partners include UBS, Credit Suisse, JPMorgan, Deloitte, JPMorgan and HSBC. A full list is provided here.

Ripple’s resounding success in expanding its enterprise footprint has taken some of the heat off XRP, which has lost more than 87% of its market value since January. By comparison, the broader cryptocurrency market has shed roughly two-thirds of its value in the same period.

As we’ve reported before, enterprise adoption of Ripple technology does not automatically equate to price growth for XRP. Hundreds of businesses are happily employing or testing Ripple’s technology without adopting the XRP currency.

Ripple is also facing regulatory scrutiny over XRP’s status as a possible security. Although the SEC  have not ruled one way or another, former regulators have attempted to out XRP as a potentially non-compliant security.

One of the more contentious debates surrounding Ripple is the central distribution model it employs. Critics point out that such a system enables Ripple Labs to sell itself hundreds of millions of dollars in XRP through an ongoing token sale. Ripple Labs was hit with a third lawsuit in June after private XRP investor David Oconer made the case that XRP was being artificially inflated by the company.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi