xRapid, a product of the Ripple franchise, is building liquidity in key markets. That’s the position of an XRP ardent supporter, XRP_Anderson, who took to twitter to express his views.
Liquidity is often a knock against cryptocurrency in general. After all, critics take the fact that coins like Bitcoin are finite and not scalable to global purchasing needs as the reason for being pessimistic on growth. XRP has been different from the start with clear intent to be the preferred cross-border transaction coin.
What is xRapid?
The solution is an innovative liquidity solution for banks that utilize uses Ripple’s XRP as a bridge currency. This Ripple product can effectively eliminate delays in payments all over the world. Besides, it dramatically lowers transaction costs between XRP users resulting in an instant and cheap cross-border payment solution.
Ripple has always had the vision of being a partner to mainstream institutions such as banks. This is because the commercial implications of banks adopting XRP is massive. As such, Ripple can make traditional banking way faster and cheaper using blockchain transactions.
To that end, it is flexible and has systems that don’t necessarily use XRP to function. Examples are the xCurrent and xVia payment facilitators. xRapid is a similar though differentiated system. This tool, therefore, provides an excellent solution for on-demand liquidity for banks performing foreign exchange using XRP.
The option therefore, makes XRP not only a currency but also a liquidity solution. Instead of banks having to keep a pool of extra money at hand, they can utilize XRP as an intermediary. The Ripple website describes xRapid as follows:
‘’xRapid is for payment providers and other financial institutions who want to minimize liquidity costs while improving their customer experience. Because payments into emerging markets often require pre-funded local currency accounts around the world, liquidity costs are high. xRapid dramatically lowers the capital requirements for liquidity.’’
Effect of xRapid
If anything, this option will definitely provide low-cost liquidity for payment providers and financial institutions. Notably, payments especially into emerging markets, need pre-funded local currency accounts worldwide. No doubt, xRapid can seamlessly provide lower capital requirements for liquidity without the need of nostro accounts.
Ripple CEO Brad Garlinghouse expressed optimism that institutions will end up adopting xRapid by close of the year. At the moment, smaller institutions and payment providers have taken up xRapid. An example is Cuallix, which is a financial institution that offer payment and credit solutions in the USA and Mexico. Then there is Mercury FX, who have shown just how beneficial xRapid can be for the customer. This solution has improved the efficiency of their international payment channels. The company CFO, Nicolas Palacios has praised xRapid for making the channel more transparent and faster.
With the success of smaller companies, it is now the big boys that can make xRapid truly go ballistic. The CEO is furthermore optimistic, saying:
‘’(There) are big names like western union, mercury effects, and money gram. These are companies moving a lot of money, what we found is that xRapid is saving them 40-70% compared to their existing tools for managing and spreading the liquidity around.’’
These large institutions can be the channel for accessing these developing markets. With widespread mainstream adoption, xRapid can truly become the liquidity solution for global remittance needs.