Ripple- the top third cryptocurrency by market capitalization is not competing with stablecoin or CBDC rather it is considered as a “bridge asset” in international remittance and settlement systems, according to Ripple’s Senior Director, Yoshikawa.
In an interview, Japan-based cryptocurrency exchange FXcoin asked some important questions with the senior executive while comparing Ripple to stablecoin and CBDC concepts like China’s impending digital Yuan.
Ripple’s Yoshikawa emphasized that Ripple’s XRP is a complementary settlement system towards the global evolution and XRP is not here to compete rather it’s an independent crypto-asset which can solve the liquidity problem by acting as a bridge for stablecoins and CBDCs and to make strong synergies universally.
Ripple Focusing on ODL
Ripple is more focused on bringing ODL (On-Demand Liquidity) formerly “xRapid” on Ripple Net (the network of institutional payment-providers that uses solutions developed by Ripple to send money globally) to avoid pre-funding problems on the Nostro accounts. The ODL solution by Ripple would remove costly issues like compliances, heavy operations, currency risk, and capital efficiency.
Reportedly, xRapid according to Ripple’s CEO, Brad Garlinghouse, has recorded over $2 billion in transactions since launch and crossed the volume more than 11 times in the first half of 2020 comparing to the first half of 2019. Garlinghouse cited the figures from Ripple’s Bloxy explorer.
Further, in the interview with FXcoin, Yoshikawa says one of the best advantages with cryptocurrency is that it is cheaper and fiat currencies can be converted on demand and there is no need to pre-fund the Nostro account.
“If the pre-funding model up to now is batch type, ODL will be able to completely shift to on-demand type.”
Along with xRapid, Ripple is deploying it’s investment arm Xpring to produce use cases for XRP while using XRP Ledger and Interledger protocols.
Ripple’s ODL solution is here to solve the pain points of loathed remittance procedures by providing cheap, fast, and easy solutions via XRP in the cross-border payment systems.
Though it is yet to understand whether stable coins and CBDCs can deliver the same solutions or not.