The Role of Blockchain and Digital Assets in Cross-Border Payments

This article was first published on Insights – Ripple

In our last discussion we showed how the fragmented landscape of cross-border payments is being redefined by the power of ISO standardization, and the fresh technology approach of RippleNet. 

Today, cross-border payments are on the cusp of transformation. Blockchain technology and digital assets like XRP can create a more frictionless cross-border payment experience.

At Ripple, our mission is to remove friction from global payments and enable money to move the same way that information does today—digitally and instantly. We work with banks and payment providers to modernize legacy systems using blockchain and digital assets to make sending money around the world easier, faster and more reliable.

Our philosophy is to provide each bank and payment provider with a real-time connection to a global network called RippleNet that rigorously adheres to the ISO2022 standard, enabling these organizations to send and receive payments on behalf of their customers, between each other immediately, with finality and transparently—regardless of the amount of money being sent or the currencies that is needs to be sent from and to. 

But being able to send a payment immediately cross-border does not solve the whole problem.  This is because funds need to be placed in the right accounts in the right country at the right time to allow payments to actually flow.  This need to pre-fund accounts is called the Liquidity Problem, and is one of the causes of hold-ups with cross-border  payments.  To solve this, Ripple has developed a solution called On-Demand Liquidity (ODL) which uses the digital asset XRP to enable funds to be sent to destination accounts immediately – literally on-demand, rather than days beforehand. 

In this way the digital asset, XRP, is especially useful in making cross-border payments faster, more efficient and less costly. XRP ...

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Insights – Ripple

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