In 2015, the state of New York began requiring a license to engage in virtual currency activity. Ripple’s BitLicense is the first granted for an additional institutional use case for digital assets.
Within Ripple’s Consensus Ledger, XRP is used to improve currency liquidity and lower the capital costs of cross-border payments. Instead of holding local currency in nostro accounts around the world, banks can use the Ripple network to consolidate their liquidity for global payments into one XRP account, held on their own balance sheets.
This singular XRP pool then allows respondent banks to allocate less total capital to service the same volume of international payments. As a result, respondent banks that use Ripple with XRP as a bridge asset can save up to 42% on costs today and up to 60% as market adoption of XRP grows.
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