In a recent report released by Edge Markets, they say that Ripple is going to revolutionize the world of cross-border payments. Ripple is working in order to improve cross-border transactions. Back in October, Ripple released the xRapid product to the market. Several companies are currently working with these products.
Ripple Grows and Expands in the Market
The report released by Edge Markets emphasizes the changes that Ripple is currently making in the payments industry. In this report, they explain that the xRapid solution is going to challenge the current global banking system. Now, most banks and financial institutions are using SWIFT services. Transfers are very slow and expensive to make.
With the xRapid product is possible for companies to send payments in a fast an easier way. xRapid sources liquidity on-demand for financial institutions and banks. In this way, firms do not need to have pre-funded accounts in different countries to send and receive payments.
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 liquid costs. WIth xRapid, payment providers and financial institutions are able to dramatically lower the capital requirements for liquidity, as it uses the XRP token to provide on-demand liquidity.”
Cory Johnson, Ripple’s chief market strategist, explained that Ripple transactions take just a few seconds to be completed, independently from where they are sent. Additionally, the fees are much lower than other systems such as SWIFT.
One of the main worries related to the exposure to digital assets is their volatility. However, Cory Johnson explains that this is not something to be worried about. While transacting XRP, the exposure is just a few seconds. Thus, there is no time for the price to fluctuate abruptly. He went on saying that there are more volatility risks associated with SWIFT transactions than with XRP. When institutions make financial transactions and have to hold the funds for several days, they are exposed to higher volatility.
A few weeks ago, Ripple announced that more than 200 companies are already using their services. In the future, the number of institutions is expected to keep growing at a pace of two or three new companies added per week.
At the time of writing this article, XRP is the second largest cryptocurrency. It has a market capitalization of $12.82 billion and it can be purchased for $0.311, according to CoinMarketCap.
