Ripple is vying with bitcoin cash to be the third-largest cryptocurrency by market value.

Ripple, or XRP, surged 89 percent Thursday to a record high of 89.2 cents and was last trading near 81 cents, giving it a market value of $31.6 billion, according to CoinMarketCap.

Those gains temporarily pushed ripple's market value past that of bitcoin's offshoot bitcoin cash, and into third place just behind the largest digital currencies, bitcoin and ethereum, according to CoinMarketCap. The website showed bitcoin cash had regained third place by late Thursday afternoon, with a market value of $32.1 billion.

Ripple surpassed the market value of litecoin on Wednesday after starting the week in fifth place by cryptocurrency market capitalization, according to CoinMarketCap.

Ripple seven-day performance

Source: CoinMarketCap

Ripple is officially the name of a startup using blockchain technology to develop a payments network for banks, digital asset exchanges and other financial institutions. XRP is the digital coin network participants use for transactions.

Interest from South Korean investors helped drive ripple's latest gains, just as they have helped send ethereum higher. In the last 24 hours, trading in South Korean won occasionally accounted for more than 40 percent of ripple trading volume, according to CryptoCompare.

Nikkei reported Wednesday Japan time that banks in Japan and South Korea began testing Ripple's blockchain technology on Friday. The cross-border trials are set to run through Jan. 31, and if all goes well, the banks plan to send money using Ripple's XRP digital currency, according to the report.

"In a landscape of a lot of hype, Ripple is the one that is delivering a reality," Brad Garlinghouse, CEO of Ripple, said in a phone interview with CNBC.

Ripple has gained traction in the last several months. In October, Ripple announced that more than 100 financial institutions use its blockchain network. The following month, the company said American Express FX International Payments and Santander would use Ripple's network for cross-border payments between the U.S. and the UK.

At the end of November, TechCrunch founder Mike Arrington announced he is launching a $100 million "cryptofund" that will be denominated in XRP.