Ripple's Cross-Border Remittance Solutions a Big Hit Among banks

Vandana  |  Jun 27, 2020

In the crypto market, Ripple has emerged as one of the prominent ones among all other cryptocurrencies. It is a remittance network, a real-time gross settlement system and currency exchange all in one which has been created by Ripple Labs. One of the major areas of service by Ripple is its cross-border remittance solution. In this e-commerce world, cross-border remittances are playing quite an important role as it makes it simply effortless to make or receive payments or remittances from outside the country. In this particular sector, Ripple has emerged to be of great use among others.

The market of cross-border payment is increasing rapidly across the world and since ages, traditional financial institutions have been playing a major role in it but with the introduction of cryptocurrency and blockchain, this is not the case anymore. People have started moving more towards the solutions integrated with blockchain technology. Ripple is a prominent one among the firms that offer cross-border remittance solutions.

Ripple’s XRP failed to gain in market value

In order to expand its cross-border payments network, Ripple has introduced its digital asset, XRP. The aim of introducing XRP was to make cross-border payments extremely convenient and fast. According to the firm, people can send or receive XRP without the need for any central intervention and along with this, it is there to act as a bridge between two currencies. Even though the firm claims that XRP is one of the best options out there for cross-border payments, the actual picture of XRP indicates something else only.

It has been seen that ever since the price of XRP its lowest in 2017, it is unable to surge back. It has been reported that when XRP was launched, the developers have created around 100 billion units of the digital currency. However, a few months back it was recorded that there is only 43.6 billion XRP in circulation. XRP is counted as the third-largest blockchain in the market because of its market capitalization. By the starting of the year, it was analysed that as compared to the previous year, XRP’s trading volume is down by 11% against USDT and in the case of BTC, it is down by around 66%. Through this, it is quite clear that the market value of XRP is dropping severely and is unable to surge back. Not only this, but several prominent figures from the crypto market are also quite doubtful whether XRP will be able to bounce back or not. Mike Novogratz, CEO of Galaxy Digital has said in his tweets that XRP is an underperforming commodity.

Ripple’s ODL being a big hit

Despite the fact that Ripple’s XRP is unable to perform well, its ODL, on the other hand, is flourishing and showing some completely different performance. ODL is On-Demand Liquidity which has been introduced by RippleNet in order to reduce the operational costs while doing international transactions and along with this increase the speed of the global payments. It is quite evident that Ripple’s ODL has helped people to reduce both time and cost for the cross-border payments.

It has been noted recently that the ODL payments of Ripple has increased more than three times as reported in the first quarter of this year. The transaction volume of dollars which has been done using ODL has increased by more than 294%. A lot of transfer services across the world have been using Ripple’s ODL in order to process money transfers. One of the prominent example among all is a tie-up of Ripple with Azimo which is a digital money transfer service based in the U.S. By using Ripple’s ODL, the firm was able to save 30-50% while doing the transactions within a few months. There are several other examples also which have been using ODL like financial software firm Finastra, money transfer service providers Sentbe and many others.

RippleNet

RippleNet is a platform which is there to make faster and cost-efficient payments across the world. It provides a kind of global payment experience that people have always been looking for in a financial payment network. The firm claims that the network is highly reliable and eliminates the chance of payment failures which is generally there while doing international transactions. It has also been mentioned that the reason behind the cost-efficiency and fast global payments is because the network is completely away from any kind of central intervention.

The platform consists of a huge network of more than 300 financial institutions which is the major reason behind its world-class service. One of the biggest reasons that is drawing people towards the RippleNet network is that it has been built on blockchain technology which provides complete transparency to the users. It has also lowered the processing cost of each transaction due to which people are experiencing that they do not need to spend high fees for each transaction. All the entities which have joined the network of RippleNet which is connected with financial institutions worldwide are able to experience this decentralized infrastructure for doing worldwide payments. With this, people are having a completely seamless experience of doing global payments that too at a very low cost.

Conclusion

Throughout the article, this has been made quite clear that despite the failure of XRP to recover back, it has been seen that Ripple’s cross-border remittance network comes up as a big hit for the banks as it works along with the financial institutions and banks to make the money transfer service fast, convenient and cost-efficient for all of its users.

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