Shares of IDT Corporation (NYSE:IDT) jumped as much as 13.3% early Wednesday, then settled to trade up 6.6% as of 11:30 a.m. EST following news that the telecommunications and payment services company will pilot Ripple's (XRP-USD) xRapid -- a platform focused on bringing the company's XRP cryptocurrency to emerging markets -- for on-demand liquidity solutions.
IDT, for its part, already uses digital assets to settle some transactions, but the adoption of xRapid could help accelerate its efforts to that end.
"We're excited to pilot Ripple's xRapid solution for on-demand liquidity," said Alfredo O'Hagan, senior vice-president of consumer payments, in a statement. "We expect that xRapid will enable us to settle more transactions in real time and at a lower cost."
And IDT isn't the only financial services company to sing XRP's praises of late. MoneyGram International (NASDAQ:MGI) shares climbed earlier this month after the company announced a similar pilot of xRapid. At the time, MoneyGram noted that XRP boasts average transaction times of two to three seconds, compared to 15 minutes to an hour for many other leading digital assets. The company also pointed out that XRP has "transaction fees of fractions of a penny," compared to fees of $30 per transaction for bitcoin.
To reiterate, the exact duration and financial terms of these pilot programs haven't been released, so investors have no idea how much impact, if any, the deal will have on IDT's top and bottom lines. But it's unsurprising to see shares climbing, given the relative mania that has surrounded companies embracing the rise of various cryptocurrencies.
Until that embrace begins to yield actual financial results, however, I think investors would do well to avoid such speculation. Instead, focus on the fundamentals underlying IDT's core business.