Ripple: Bittrex is “preferred” crypto exchange for cross-border USD payments
Ripple, the software firm behind the digital asset XRP, said on Thursday that Bittrex will be its preferred crypto exchange for xRapid transactions that move through U.S. dollars. Additionally, Bitso and Coins.ph will be Ripple’s preferred platform for transactions done using Mexican Pesos and Philippine Pesos, respectively.
— Cory Johnson (@CoryTV) August 16, 2018
For those who many not know, xRapid is Ripple’s cross border payments product, which leverages the technology behind XRP to make instant cross-border payments.
So how do these cross-border transactions happen? A financial establishment that has an account with Bittrex starts a payment transaction in U.S. dollars. When done using xRapid, the fiat currency gets converted into XRP on Bittrex.
Then, the payment amount is settled over the XRP Ledger. If the payment was done to an enterprise or user in Mexico, for example, the crypto exchange Bitso would convert the payment amount from XRP into pesos. This amount is then settled into the recipient bank account.
“…as we move the product from beta to production later this year, these exchange partners will allow us to provide financial institutions with the comfort and assurance that their payments will move seamlessly between different currencies,” said Cory Johnson, chief market strategist at Ripple, in a statement.
The partnership would make cross-border payments a lot more affordable for over 10 million Filipino citizens working abroad, according to Coins.ph CEO Ron Hose.
Is xRapid a better option for cross-border payments?
xRapid, which uses XRP to offer on-demand liquidity, was developed to lower costs substantially and enable real-time payments in emerging markets. These features make it a viable option to service cross-border payments.
Ripple said that financial institutions that participated in xRapid’s pilot program saved 40-70 percent on average in costs compared to traditional firms that facilitate cross-border payments.
Moreover, the transactions done using xRapid settled in under two minutes compared with two to three days using traditional means.
Asheesh Birla, senior vice president of Ripple’s product management, recently said that the company was targeting partnerships with upstart payment providers for its xRapid solution.
The reason behind this strategy is the fact that an established player like Western Union would have to move all its volume over to xRapid to take advantage of the solution, on account of fixed costs and optimized liquidity flows.
Image via Shutterstock
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