Ripple is introducing another use case for its digital asset XRP.
The company launched a new beta service on RippleNet called ‘Line of Credit' to allow its customers to use On-Demand Liquidity (ODL) to borrow from Ripple to initiate cross-border payments using XRP.
“XRP is the key behind what only RippleNet can offer,” said Asheesh Birla, GM of RippleNet.
For now, the price of XRP hasn’t reacted to the news much enthusiastically, currently trading at $0.256, along with the green market.
By removing one of the “biggest” barriers, limited access to working capital, to growth, Ripple intends to help small and medium-sized companies (SMEs) and FinTechs to keep on growing without freeing up already limited capital, which involves additional overhead and is a slow, burdensome, and inefficient process.
This capital can then invest in the business to expand into new markets and reach new customers.
Ripple’s latest solution will be providing its customers with upfront access to capital for every market through one credit arrangement.
With no hidden fees, those customers who use ODL on RippleNet can purchase XRP from Ripple on credit, for which they are charged one fee on the amount borrowed.
As per Ripple, this service has already been piloted by RippleNet 300+ customers, although it didn’t provide any specific names.
“Early customer feedback on the Line of Credit beta shows that the service is helping money transfer service businesses make global transactions even more affordable for their customers,” Birla said.