In discussions of blockchain technology and its effect on payments, the idea that cryptocurrencies like Bitcoin will replace fiat money abounds.
While arguments for and against the feasibility of such a hypothetical future tend to split opinions, several tokens are already powering cross-border transactions for some of the world’s biggest financial institutions (FIs).
For example, the Ripple and Stellar blockchains with their respective XRP and XLM tokens have been deployed by banks and payment service providers for a range of international and domestic transaction types.
Since its inception in 2012, Ripple has differed from other blockchain projects in its design, governance and ambition, choosing to focus on bringing together FIs to realize the potential of distributed ledger technology and create a more efficient transaction mechanism than those which characterize the global economy today.
And among the products connecting the global network of banks and payment providers using Ripple’s distributed financial technology, known as RippleNet, is the on-demand liquidity solution xRapid.
Using XRP tokens to create on-demand liquidity, xRapid seeks to lower the capital requirements for FIs making multi currency transactions, with significant advantages for transactions into emerging markets, where currency liquidity is typically low.
The latest companies to deploy xRapid payments on RippleNet are French FinTech Lemonway, which specializes in enabling payments for marketplaces, and Swedish money transfer business XBaht, which enables cross-border remittances between Sweden and Thailand.
Paying with Stablecoins, Fiat
Banks, too, have leveraged RippleNet to help streamline cross-border payments, allowing them to pass on the lower transaction costs and faster processing times to customers.
Early adopters of the technology include US’ Bank of America and PNC Bank. But in recent years, Ripple has been gaining traction in Europe and the Middle East, with the likes of Santander, Standard Chartered and Qatar National Bank (QNB) deploying the network to power cross-border payments.
Of course, cross-border transactions aren’t the only ones in need of more efficient solutions.
Prior to the recent announcement, Lemonway was already deploying the technology in the euro-to-euro payment corridors thanks to Nium’s global money transfer network, which utilizes RippleNet for its speed and cost-efficiency.
However, Ripple isn’t the only player making waves in the blockchain space. As Nium’s head of crypto and Web3, Joaquin Ayuso de Paul, told PYMNTS earlier this year, Nium is leveraging another blockchain technology, Stellar, to help international clients pay out in more than 100 currencies to over 190 countries.
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According to Ayuso de Paul, because Stellar makes it easy to offramp crypto assets, businesses using Nium can leverage the technology to make payments with stablecoins at one end and disburse fiat at the other.
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