Ripple Vs Banks: Can XRP Coin Be A Catalyst For Cross-Border Financial Banking System?


During its inception, Ripple (XRP) was intended to provide a cross-border platform that facilitates the seamless, swift and reliable transfer of funds. Now, the coins is ranked third among cryptocurrencies with the highest market capitalization value.

The financial industry is currently dominated by banks. Despite the high prevalence of payment processing systems, it still a challenge to send funds internationally. However, the developers of the Ripple blockchain network discovered that decentralization is the solution to the cross-border transaction menace. This is how XRP came into existence.

XRP And Ripplenet

When the coin debuted on the crypto space, it achieved several significant milestones. For instance, its remarkably short block processing time of 3.0 seconds is vastly superior to Bitcoin’s 10 minutes. Also, it has affordable transactions cost of 0.1 cents per process, which is a lower when compared to other major digital currencies.

As of now, making an international funds transfer via conventional banks is both expensive and time consuming. This experience causes massive inconvenience to both individual and corporate investors, especially in today’s world that is characterized by large volumes of trading transactions. As a solution to this problem, Ripple has developed the Ripplenet platform, a solution that seeks to streamline global payments for small and medium-sized enterprises.

Notably, Ripplenet increase the speed of transactions, alleviates expenses and makes global payments reliable. Besides, this platform is equipped with a host of distinctive features, including the drag-and-drop functionality that enables users to easily integrate their invoices onto the system. Therefore, small business that enlist this services are assured of a swift cross-border payments processor that charges minimal transaction fees. As per the World Bank, the global remittance payments volume will reach the $500 million mark this year, representing a 3.5% improvement over last year’s performance.

Centralization Concerns

However, XRP blockchain is often criticized for being centralized. As per the CEO of Ripple Labs, David Schwartz, most of the nodes are not controlled from the company’s San Francisco headquarters. David defended their operational mechanism saying that the much-favored proof-of-work consensus algorithm is perceived as decentralized, it eventually grants control to select miners.

Instead, the XRP blockchain uses a consensus protocol that depends on majority of verifiers to record and authenticate transactions without incentivizing a specific group. In this case, validators are not paid to authenticate transactions.

It is worth noting that the Ripple Company has numerous blockchain-related products, including Ripplenet, xRapid and xCurrent, all of which have designated purposes. Also, a majority of the XRP are held by the blockchain’s developers, meaning that they can leave or enter the market at their own volition. This ownership also implies that they have a substantial influence on the prices of XRP.

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