Ripple Challenged At UK Parliament Hearing

Ripple was put on the defensive at a hearing on cryptocurrencies and blockchain at the U.K. Parliament after a former developer criticized the company’s products.

According to CoinDesk, Martin Walker, a former product developer at blockchain consortium R3, singled out Ripple’s XRP cryptocurrency and blockchain platforms when he said that the technologies were unlikely to solve inefficiencies in the country’s financial sector.

Walker, who is now director of the non-profit Center for Evidence-Based Management, argued that Ripple’s technology doesn’t offer anything more than the existing SWIFT messaging system, saying “the hard thing about tracking payments is actually getting the people involved in the payments to actually upload the status.

“So simply having a blockchain doesn’t actually get people to update the status of where the payment is,” he added.

Walker is also unimpressed with the company’s pilot projects that aim to use XRP to bridge two currencies in an international transaction.

“You have the concept of a crossing currency to deal with that scenario where there’s a lack of liquidity,” Walker stated. “You need someone to provide the liquidity to be able to change into and out of Ripple. And holding Ripple, a currency which has seen its price drop 80 percent and then back up 100 percent in the course of the last two months, is just not credible. So, putting cryptocurrencies into the financial sector is a huge source of risk.”

In addition, the ministers at the hearing also expressed concerns about Ripple, saying they were unsure about XRP’s relationship to Ripple Labs.

Member of Parliament Stewart Hosie commented that “if people buy XRP, a financial asset from Ripple Laboratories, it doesn’t entitle them to an ownership stake, there’s no right to be converted back into conventional currencies and it doesn’t pay any return. It also seemingly has no purpose.”

Ripple’s director of regulatory relations, Ryan Zagone, said “that’s a common misconception.”

“XRP is open source and it was not created by our company, so that existed as an open source technology,” said Zagone. “We created a company that was interested in modernizing payments and then began using that open-source tech to do so … We didn’t create XRP … We do own a significant amount of XRP; it was gifted to us by some of the open-source developers that created it. But there’s not a direct connection between Ripple the company and XRP.”