Blockchain firm Ripple, which has recently threatened to leave the United States if the regulatory climate does not improve, has launched a new XRP-based loan product dubbed “Line of Credit”.
The product is currently in beta and will let On-Demand Liquidity (ODL) customers access working capital loans to conduct cross-border transactions using Ripple’s XRP cryptocurrency. “Those using ODL on RippleNet can purchase XRP from Ripple on credit,” a blog post explained. Ripple notes that Line of Credit is not a loan subject to tax obligations but rather a payment option to finance the purchase of XRP coins.
The new offering is a solution aimed at helping companies that have the potential for growth but do not have enough capital to execute their goals. In particular, Line of Credit will give fintechs and small and medium-sized enterprises (SMEs) an edge on the competition with established large enterprises.
According to the blog post, customers will be charged “one fee on the amount borrowed, with no hidden fees”. Additionally, the loans will be approved much faster than through legacy financial channels.
It should, however, be noted that Line of Credit will only be available to eligible RippleNet institutional players as retail customers and the general public will not be able to use the product. Moreover, its availability will be limited to geographical locations which could change in the future.
The new lending offering is the latest move in Ripple’s objective to develop the Internet of Value (IoV) and make money transfers as easy as sending an email. Notably, Ripple first revealed plans to develop a new service that would provide working capital loans to its RippleNet customers back in May this year. Five months later and the San Francisco-based firm has delivered on its promise.
The ODL service, launched in 2018, currently has over two dozen customers. The XRP-based liquidity network is now live in the Australian, Mexico, and the Philippines market. Ripple has also announced plans to open more payment corridors in Brazil, Asia-Pacific (APAC) as well as Europe, the Middle East, and Africa (EMEA) sometime this year.
Nevertheless, the price of XRP has continued to struggle for momentum despite these encouraging developments. The cryptocurrency is currently consolidating at $0.25, still failing to recapture its former number three position in market capitalization.