The World Bank (WB) seems to have a very positive view of Ripple’s xRapid product. In a recent article, Marc Nicoli, the World Bank’s senior financial sector specialist, said that xRapid could be a potentially transformational technology. Ripple is one of the most important cryptocurrency-related companies in the market.
The World Bank Believes In The Future Of Blockchain Technology
Ripple’s xRapid solution was praised by the World Bank. They have compared blockchain technology with the “slow and opaque” traditional business to business remittance industry that is plagued with inefficiencies.
About it, the article says:
“These shortcomings make the cross-border payment industry ripe for disruption and innovation. Some see distributed ledger technologies (DLT) as having the potential to drive industry-wide change. Indeed, B2B cross-border payments, traditionally by fragmentation and opacity, are a potential use case for the successful implementation of DLT.”
They specifically mentioned that Ripple piloted the xRapid product as a cross-border payment solution between Mexico and the United States, a very important economic corridor. The firm was able to reduce between 40% and 70% of foreign exchange costs with the xRapid implementation. Transfers have also been processed very fast and in a very easy way as well.
The report explains that remittances are usually more expensive in those places where lower costs are needed the most. Sub-Saharan Africa, for example, remains the most expensive region in the world to send money to. It has an average cost of 8.97%.
With Blockchain technology it is possible to change the reality that many individuals are currently experiencing. Just in 2018, the global remittances business reached over $642 billion. Several countries, including Nepal or Haiti, heavily depend on remittances from other countries, thus, having better services would clearly help those countries that need it the most.
There are several countries and corridors that are already using xRapid in order to process faster and cheaper payments. The Philippines, Mexico, the United States, and Europe are all connected with XRP as a liquidity source.
Let's suppose that an individual in the United States wants to send money back to his family in Mexico. Using the xRapid solution created by Ripple it is possible to do it in just a few seconds and for very low fees. Meanwhile, if he would have used traditional financial services, the fees would be very high and the transaction could be processed in several days.
At the moment, there are more than 200 partners working with Ripple, and in the future, the number could keep growing. At the time of writing this article, XRP is the third largest cryptocurrency in the market. It can be purchased for $0.31 and it has a market capitalization of $12.89 billion.