Ripple is a new age, real-time gross settlement platform that is pinned on efficiency, cost-savings, and speed. And they may be secretly eyeing the busy and high volume EUR/USD corridor.
While Ripple and Ripple Labs–the issuer of XRP, are two separate entities, the incorporation of XRP by bank institutions remain a challenge because of regulatory concerns.
Ripple as an Efficiency Platform
Banks are risk averse, preferring to stay on the sidelines until there is clarity.
Although over 300 banks that are connected to the RippleNet, a suite comprising On-Demand Liquidity (ODL)-formerly x-Rapid, xCurrent, and xVia, only but a few leverage XRP and ODL.
There are benefits as cost savings and instantaneous settlement as several pilot programs reveal but court cases and lack of clarity is definitely an impediment.
For financial institutions using ODL, partner exchanges including Bitstamp, Coins.ph, and Bitso are critical.
On-Demand Liquidity (ODL) Partners
These exchanges enable the successful implementation of ODL, allowing the smooth conversion of funds from one currency to another instantaneously and cheaply with XRP as a bridge.
Bitso facilitate the movement of funds between the United States and Mexico, opening up the busy corridor.
Coins.ph enable free movement of funds from Philippines and United States, while Bitstamp enable funds movement between the United States and Australia.
The USD-AUD movement is made possible by Flash FX which has activated ODL.
FlashFX: Fund Your Bitstamp USD Account in Minutes
— FlashFX (@fxflash) December 2, 2019
Flash FX also uses Australia’s New Payment Platform (NPP) which simplifies and speed up transaction between different financial institutions in Australia.
Ripple eyeing the EURUSD Corridor?
Although the AUDUSD is busy and one of the most active pair in the FX market, there are speculations that Ripple has their eyes fixed at the more fluid and deep EURUSD market.
The EURUSD commands 23% of all FX transactions in 2016 since the United States and the EU are two of the world’s leading economies.
Citing a Q4 2019 Ripple report, the ardent supporter advised that despite the low ODL volumes, it wise to watch what the firm does:
“In addition to the USD-MXN and USD-PHP ODL corridors, the company went into production with ODL payments originating from Australia into USD and PHP, and a new production ODL corridor from EUR-USD. Plans for additional corridors across APAC, EMEA and LATAM are in progress for 2020.”
Don't listen to what Ripple says, look at what they do…
Going after high friction corridors they say…
launching EUR/USD in ODL, the most liquid corridor in the world!
AUD/USD is also liquid.
— Anders Lundberg (@X__Anderson) April 10, 2020