Earlier there was uncertain nervousness about Ripple (XRP) in the aspect that it may not stand to be classified as a cryptocurrency as talk was on in the crypto circles that it’s controlled by Entity Ripple and could be failing in the test of decentralisation. However, lately XRP has real value evident by the practical use cases of this currency that is actually used for cross border remittances.
XRP corridors providing liquidity in 5 fiat currencies
Now, XRP is used for cross border remittances in Ripple’s 5 corridors providing liquidity in these fiat pairs - US dollar, the Euro, the Mexican peso, the Philippine peso, and the Australian dollar. Out of these corridors, the Mexican Corridor is surging the most daily with trading volumes of XRP/MXN pair, although the trading volumes in other Ripple corridors established for the Philippines (XRP/PHP) and Australia Dollars (XRP/AUD) are also surging.
Reference Articles - https://u.today/all-xrp-liquidity-indexes-reach-new-highs-is-covid-19-crisis-driving-this-growth
https://xrprightnow.com/ripple-and-moneygram-launch-odl-in-5-corridors/
First company making use of Ripple’s Blockchain Solution - MoneyGram
The above 5 XRP payment corridors are established through Ripple’s partnership with MoneyGram, a popular financial services company into the business of undertaking cross-border payments. MoneyGram is using XRP’s On Demand Liquidity (ODL) solution, and appears to be the first such money remittance company making use of Ripple’s blockchain powered technology for undertaking part of it’s cross-border remittance services.
Seeds of change planted impacting the future of Financial Institutions
Ripple’s On Demand Liquidity (ODL) solution is proving to be effective in enabling fast and low cost cross-border money remittances. The Foreign currency exchange settlement process happens automatically here using the digital asset - XRP.
Ripple with ODL has brought to the world a utility product for financial institutions and banks which can change the way institutions do money transactions in future utilising the power of blockchain technology. This may transform and model financial institutions to adopt blockchain technology for money operations. Therefore one can expect the world to give a definite goodbye to that obsolete SWIFT money transfer system.
Further Details on Partnership between Ripple and MoneyGram
Ripple has invested it’s funds on MoneyGram for the purpose of enabling MoneyGram to use Ripple’s blockchain powered products for facilitating cross border transfers. Last year Ripple gave MoneyGram a total of 11$ million dollars as compensation for using it’s blockchain technology to provide liquidity to foreign exchange markets. Ripple, the parent company of XRP, has also purchased 10% stocks of MoneyGram with this stock investment amount totalling $50 million.
Ripple’s tie with MoneyGram seems to be paying off well, as Ripple has successfully forayed into the business of cross border money remittances. Over time, as Ripple’s ODL solution is used on a large scale, it would be beneficial for both these companies providing them both with profits and increased cash flows while reducing MoneyGram’s cost by reducing its working capital needs.
Reference Articles
https://www.coindesk.com/moneygram-got-another-11m-from-ripple-to-use-its-cross-border-payments-tech
https://cointelegraph.com/news/moneygram-expands-ripple-partnership-with-113-million