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The future of money is exciting especially with the advent of blockchain technology and cryptocurrencies. The traditional banking system is slow and full of loopholes, while the remittance system is also changing drastically as the process is getting quicker and cheaper. Blockchain tech is playing a key role in this transformation and some of the enterprises in the industry are leading the revolution. Ripple has acted as a major player in the scene as it has changed the way we look at remittance. Its on-Demand Liquidity product (ODL), previously known as xRapid, has been leveraging the companies native token XRP, to function as a bridge between two different currencies thus eliminating the need for any type of pre-funding. The platform holds massive potential as it can enhance the traditional remittance market. Multiple businesses and even Banks are keen on utilizing Ripple’s ODL to meet customer demands while benefiting from the various properties of a blockchain. If implemented globally, this could make banking a lot more accessible as well. Talking about the aforementioned points, Ripple CTO David Schwartz recently discussed the various problems with the global financial system and how Ripple can make things easier, in a keynote speech at Haas School of Business UBRI Connect 2019. Schwartz talked about how millions of people in America have no access to any kind of financial services. He stressed over the fact that Americans believe the banking system in America is “overbanked” as one could easily open a bank account from anywhere they feel like. He then clarified that this is not the case. “A fairly shocking statistic, 24 million Americans are under-banked, alongside almost 2 billion people worldwide.” This is the reason why Ripple has focused its efforts towards facilitating cross border payments with its payments products. Payment networks today lock up money in distinct systems that are not compatible with each other. Schwartz compared this scenario with the early ages of the internet where he said “Information used to proprietary and slow.” According to Schwartz, XRP could play a pivotal role in making payments faster and cheaper by allowing financial institutions to use XRP as a tool to overcome liquidity problems. Basically a payments system that is available to anybody, anytime, anywhere. Talking about RippleNet, he further clarified with an example: “So, for example, without some sort of a cryptocurrency solution, to make a payment to the Philippines you’d have to have Philippine pesos sitting in the Philippines [...] What RippleNet does with XRP, is the sender can exchange their sending currency, say US dollars for XRP, send the XRP on the XRP Ledger and buy Philippine pesos precisely when they need them.” Earlier in an interview with Jay Kim at the Swell conference in Singapore, Ripple CEO Brad Garlinghouse revealed his vision of replacing the traditional remittance system with XRP’s ODL product. He said that at some point, ODL would deploy a $2 trillion pool of liquidity to reduce transfer costs. He elaborated: “There’s $10 trillion pre-funded in accounts around the world, which is effectively the oil that is facilitating the engine that is correspondent banking. The oil has to be there or correspondent banking won’t work. Now, if we can reduce the amount of oil that improves the efficiency of the global economy. So we feel like, bit by bit, we’re going to be able to take that $10 trillion down to $9 trillion, to $8 trillion. This is a journey that will take many years. But we’re incredibly enthused by the progress we’ve made in a relatively short amount of time.” Ripple isn’t just vocal about its plans. The company has already started implementing its financial products across various sectors with corporate partnerships. One of the biggest partners with Ripple right now is Moneygram, the world’s second-largest payment processor. Moneygram has been implementing ODL to move 10% of its Mexican peso foreign exchange transaction volume. These partnerships are boosting ODL use while also giving the blockchain industry a lot of exposure. Ripple’s vision of a faster and cheaper banking system might still be a long way to go, but it surely is paving a road for future development in this sector.

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