In a recent FinTech conference, Ripple executive Sagar Sarbhai revealed that XRP had piloted with 12 banks before the xRapid product was created. Sarbhai, Ripple’s head of government and regulatory relations for APAC and the Middle East, said the participating banks were based in different parts of the world.
According to an AMBCrypto report, he said, “In 2016 what we did was we piloted with 12 banks. These 12 banks were based across regions across the globe and they did not have prefunded relationships with each other. And what we did was we gave these banks some XRP and asked them to settle within themselves and it worked beautifully.”
Though XRP fits well in the use-case of cross-border payments, a system to allow banks to use it was required which would include the volatility risk reduction and accounting for regulatory atmospheres. As these were the issues that the banks faced when XRP piloted with banks for cross-border payments. Sarbhai said, “[They said] we would love to adopt it but we cannot, because there are capital requirements and regulatory uncertainty. So they said that, it’s volatile, [and that] there are no set of regulations, so we cannot hold those assets in our books.”
The issues led the team at Ripple to find a way out, eventually resulting in the creation of xRapid. To increase the adoption of the technology, Ripple started partnering with payment providers willing to try the product. Sarbhai said: “That works because they don’t have to hold the digital asset on their books but using the piece of software called xRapid they can actually connect to a digital asset exchange, convert fiat to XRP at that time and XRP to fiat in real time on the other end and that actually happens in 3 seconds so there’s no case of volatility risk as well.”
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