Blockchain firms in $1.3b virtual currency battle

LOS ANGELES • Two of the world's largest blockchain developers are battling over more than US$1 billion (S$1.3 billion) in virtual currency options, in a dispute that may help establish the leading player in providing new payment technologies to financial companies.

R3, a blockchain start-up that leads a group of more than 100 firms, sued rival Ripple Labs in a Delaware court last Friday, accusing it of reneging on an options agreement for Ripple's XRP digital currency that is now worth more than US$1 billion.

Ripple filed its own suit in California accusing R3 officials of duping it on other agreements.

The suits are a sign of a break between R3 and Ripple, which used to partner on developing digital-ledger technology, or blockchain, for financial institutions, but are increasingly competing for customers. That technology allows digital information to be distributed securely, and prevents double booking, a critical requirement for virtual currency.

Winning access to digital assets worth more than US$1 billion could give New York-based R3 a funding boost and a leg up in the competition with San Francisco-based Ripple and other rivals.

"R3 does not discuss the details of pending litigation,'' Mr Charley Cooper, its managing director, said in an e-mailed statement. "We are confident in our position and hope for a speedy resolution of this matter.''

Ms Monica Long, Ripple's vice-president of marketing, said in an e-mailed statement that its filing is straightforward. "R3 misrepresented their ability and intent to deliver on their commitments.''

Digital currencies have been on a tear this year, with a total value of almost US$149 billion, according to CoinMarketCap. The most well known of these, bitcoin, has more than quadrupled in value since the beginning of the year, outperforming asset classes such as gold, according to data compiled by Bloomberg.

Ripple's XRP is the fourth-largest cryptocurrency, based on market cap, according to CoinMarketCap.

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A version of this article appeared in the print edition of The Straits Times on September 12, 2017, with the headline 'Blockchain firms in $1.3b virtual currency battle'. Print Edition | Subscribe