Crypto bank Uphold adds Ripple’s XRP to its buying power

The price of Ripple’s XRP kept falling Wednesday despite news that Uphold would now enable fee-free purchases.

“XRP is now live on Uphold for members to buy, hold and transfer between any of our 30+ currencies and commodities,” the company said earlier this afternoon in a statement. The popular wallet holds over $153 million in seven other cryptocurrencies, 23 fiat currencies, and four precious metals.

Two months ago, it was announced that former Ripple exec Greg Kidd invested $57.5 million into Uphold. Kidd said at the time:

“Because of the strength of Uphold’s compliance and controls, I’m willing to pledge a certain amount of my balance sheet, or the balance sheet of my venture company…as a reserve. That means that if there was some adverse effect at Uphold that might put it otherwise in a position of operating as a fractional reserve, this is like an insurance program that will make sure that user balances are protected.”

According to Uphold  CEO Anthony Watson, the Ripple deal had been in the works for over a month, although they teased it out in a Twitter poll  a week ahead of the March 28 announcement.

Member Poll: What cryptocurrency/token would you like to see Uphold support next? Members currently have access to 30+ currencies including $BTC $BAT $BCH $BTG $DASH $ETH $LTC #cryptocurrency

— Uphold (@UpholdInc) March 20, 2018

However, it’s not as clear-cut as it would appear at first glance  That’s because the XRP doesn’t leave the platform. Uphold said in its statement Wednesday:

“Phase two will launch in the coming weeks, at which time the Uphold platform will connect to the XRP Ledger enabling full functionality including deposits and withdrawals of XRP. For now, members can easily buy and sell XRP within their Uphold wallet (you will not be able to move those funds to an external wallet until the launch of phase two).”

XRP is free to buy, but selling it into another wallet or “card” on Uphold will incur the platform’s usual fees.

Uphold brands itself as a “cloud money vault.”  It is not a cryptocurrency exchange like Coinbase, but more like a bank for buying and holding different currencies, converting them into other currencies, or sending them to other members internationally. The “other members” part is key. You aren’t sending the amount from one bank account to another, but from one Uphold account to another.

Legally—and in terms of compliance—there are huge differences  when it comes to cloud wallets like Abra, cloud banks like Uphold, exchanges like Binance, and fiat-connected exchanges like Coinbase. So at least for now, this is strictly an internal transaction and it is not connected to the XRP ledger.

This goes along with their digital logbook system where you can receive money in several currencies. If you and a traveling friend from another country are using your local bank accounts and want to square up, you can use Uphold as a sort of international Venmo.

Reporter’s caveat: I am writing this from New York,which requires an extra layer of compliance known as a Bitlicense, so I can’t even confirm whether their internal, fee-free-for-now prices are good or not. (Meanwhile, it is not helping XRP’s trade price, which as of this writing, still fell 2 percent today to $0.56 or about half its price from earlier this month.

But while I can’t buy crypto just, yet I can hedge my money into the price of gold on the Philadelphia Gold & Silver index by “converting” my money into an “XAU card”. It’s a bit less like buying chips at a casino that you can convert into coins and a bit more like having a card with that casino that is directly connected to your account only. If the price of gold goes up, I can sell it back to myself for a 2.05% fee.