Ripple and XRP Could Revolutionize Cross-Border Payments With New Software
In a recent interview with The Edge Singapore, Cory Johnson, chief market strategist for Ripple, said that using Ripple’s software is similar to what banks have always been doing with the old software, usually known as SWIFT.
According to a report released by Edge Markets, Ripple is going to be revolutionizing the cross-border payment industry. Improving liquidity, Ripple is going to be providing a key advantage to large institutional players.
On the matter, the report says:
“From the perspective of big financial institutions, better liquidity is a key advantage. Payments, especially to parties in emerging markets, often require pre-funded local currency accounts around the world, resulting in high liquidity costs.”
Using the xRapid product, payment providers and financial institutions are able to lower the capital requirements for liquidity since Ripple uses the XRP token to provide on-demand liquidity to customers.
At the moment, SWIFT is using an old technology that increases costs for companies to process these transactions. During the last 45 years, these financial companies have been using SWIFT to handle these payments.
XRP has an advantage compared to other digital assets in the market that make it much more efficient for processing these payments. Ripple is currently holding around 60 billion units of XRP that are used to power the xRapid product, according to the report.
Ripple has also recently announced that they are working with more than 200 partners located all over the world. These companies are currently part of the RippleNet and some of them could soon start to use XRP to source liquidity on-demand.
The xRapid product was launched back on October 1, 2018 and allow companies to use XRP in commercial payments. There are some financial firms such as MercuryFX, Cuallix and Catalyst Corporate Federal Credit Union that are planning to start using this service and XRP.
Remittance set for a
revolution with Ripple
Cory Johnson: The places where we’re going to be biggest in is where it is most diffi cult
to move money @Hodor @CoryTV @bgarlinghouse@chrislarsensf #Ripple #XRP
PDF https://t.co/r9x583Sg4v pic.twitter.com/YlguK1l8b6
— 𝗕𝗮𝗻𝗸 𝑿𝑹𝑷 (@BankXRP) January 26, 2019
There are other products that are being developed by Ripple such as xVia, targeted at corporates, payment providers and banks that want to send payments across various networks using a standard interface. The xCurrent software solution enables banks to settle cross-border payments instantly with end-to-end tracing.
It is possible for financial institutions to send messages in real time and confirm that the payment details are correct before confirming the delivery once it is settled.
According to Cory Johnson, Singapore is ‘crypto heaven’ because the government is focused on bringing new companies to develop using distributed ledger technology (DLT). Indeed, Singapore has taken a very forward-looking approach to cryptocurrencies and DLT.
Now, Ripple is focusing its efforts on marketing and improving the current products that the firm is offering to the market. The company will also be working to make cross-border transfers much easier and cheaper for firms all over the world.
XRP is currently the second largest cryptocurrency in the market. Each XRP can be purchased for $0.309 and it has a market capitalization of $12.75 billion. In the last 24 hours, the digital asset lost 2.67% of its value.
Some of the countries that are going to be benefited by Ripple’s technologies are those that have been struggling to expand banking and financial services to the population.