The CEO of Ripple, Brad Garlinghouse, explained that the company is working in order to use XRP as a tool to move money across borders.
At the same time, during an interview on The Jay Kim Show, Garlinghouse mentioned they want to increase XRP liquidity to over $2 trillion in the coming years.
Could XRP Reach $2 Trillion Liquidity?
During the last few years, XRP liquidity in the current system moved from as little as $100,000 to $200 million.
This shows that there has been a genuine work from Ripple in order to expand XRP usability around the world.
Ripple is working on the XRP-based remittance product called On-Demand Liquidity (ODL) that aims at replacing the current cross border money transfer model that depends on legacy systems such as Swift.
At the moment, sending funds from a country such as the United States to the United Kingdom may take a few days, while sending the funds through a traditional flight may take even shorter.
By using the On-Demand Liquidity product, transfers can be processed in just a few minutes without being affected by volatility and between countries with low fiat trade liquidity.
Garlinghouse has also explained that there are over $10 trillion in pre-funded accounts around the world. This is the money that is being used to facilitate banking trade and exchanges.
On the matter, he commented:
“If we can reduce the amount of oil (money in pre-funded accounts), that improves the efficiency of the global economy. So we feel like, bit by bit, we’re going to be able to take that $10 trillion down to $9 trillion, to $8 trillion.”
He went on saying that this is a journey that is expected to take several years, but they are sure they are doing a lot of progress.
Ripple is working not only with banks and larger financial institutions or firms but also with cryptocurrency exchanges. These exchanges are certainly important because they provide the necessary liquidity in order to purchase XRP in a specific jurisdiction and sell them in the receiving location.
After the transaction is processed in just a few seconds or minutes, the funds should arrive at the user’s bank account.
The whole process reduces the friction for international payments and transactions. At the same time, the fees are very low and transactional times are also very fast.