Bitcoin is quickly being caught up by rival cryptocurrencies which offer more features but money manager Brian Kelly has revealed why Ripple, the second largest digital currency, is controversial.
Speaking to CNBC, he said: “Ripple’s somewhat controversial here in the decentralised world because Ripple is a centralised currency.
“It was premined 100 percent by the Ripple company.
“Now what they’ve done to alleviate a lot of those fears is they’ve locked up a lot of the Ripple that they own.”
XRP is the cryptocurrency that powers Ripple’s blockchain technology to send money across the world in real time settlements.
Ripple has attracted tens of millions of dollars worth of investment leading to it being dubbed the bitcoin that banks like.
Mr Kelly said that Ripple has calmed some of the concerns by slowly making the cryptocurrency available in the future.
He said: “They’re going to slowly mete it out over the next several years, this has alleviated some of the concern.
“That being said, purist denaturalised coin people don’t necessarily like what Ripple has done.
“I happen to like that they have several banks using it, and they have a company that is out there trying to make the value of the currency go high.”
Ripple also does not hold the level of anonymity that bitcoin does, which makes the currency more favourable to banks.
Banks are taking notice of Ripple, with over 100 banks around the world using the blockchain, according to the company’s CEO Brad Garlinghouse.
He told CNBC: “We have over 100 banks working with Ripple today around the world.
“I think the vast majority of banks, like 99.9 percent of banks actually are paying other banks, the global money sender banks like JP Morgan or Citibank to make those settlements.
“A lot of the banks are very excited about democratising how these global payments flow.”
The XRP token that powers Ripple climbed to $3 on Wednesday for the first time ever. According to CoinDesk, the cryptocurrency had fallen 24.99 percent to $2.54, at 10:19 am, in London.