By Allen Scott Mar 21, 2018 6:30 AM EDT While Ripple is “not a bad investment” right now, major challenges exist when it comes to long-term prospects for its bank-oriented digital token (XRP), according to Weiss Ratings. Independent ratings agency Weiss Ratings began listing cryptocurrency grades since January of this year.

While Bitcoin’s relatively low grade of a C+ (recently upgraded to a B-) received most of the attention, the agency also graded many other cryptocurrencies, helping investors pick cryptos with the highest potential while avoiding the least promising. Recently, Weiss Ratings put the spotlight on the third most popular digital token, Ripple (XRP), which currently has a market cap of under $28 billion USD.

“In the near term, the Ripple token (XRP) is not a bad investment,” writes Juan M. Villaverde, editor at Weiss Ratings, who has been covering cryptocurrencies since 2012. He adds: What puzzles me, though, is how XRP owners can hope to profit from Ripple’s long-term trajectory.

Villaverde notes that investors in Ripple’s XRP token could make some nice returns in the near-term, but there are two big dilemmas that should not be ignored about the token as an investment in the long-term. First, the parent company Ripple is relying heavily on making deals with banks and financial institutions, helping them “tokenize” their fiat to cut costs and time by transacting via the Ripple protocol.  But the Ripple network is merely a transfer vehicle, used to transact from fiat to Ripple and back to fiat.

What’s more, banks are not even obligated to use the XRP token for these transactions at all, notes Villaverde. He states: In fact, a whole new set of tokens will be issued for each fiat currency, much like gold trusts or funds issue shares of gold. Read more from…

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