Digital currency Ripple surged by 56 percent on Friday reaching an all-time high. It has surpassed ethereum as the second largest cryptocurrency in terms of market capitalization.

Officially known as XRP, it climbed to a record high of $86.3 billion on Friday afternoon surpassing ethereum's $73 billion market cap.

Bitcoin remains the largest with a market cap of roughly $247 billion. As of Friday, Bitcoin accounts for 41 percent of the total cryptocurrency market capital, while Ripple and Ethereum account for 12.5 and 12.1 percent each.

XRP or XRP tokens were created by an American startup named Ripple Labs, that is into the global money transaction business (RTGS). It is not similar to other cryptocurrencies like bitcoin or litecoin.

XRP is more centralized and is backed by traditional currencies. It was created by Ripple Labs to be able to seamlessly pay transaction fees between financial institutions like banks. Funds can be transferred between banks who use this service. Axis Bank was the first in India to offer payment services using Ripple that uses blockchain technology.