Asheesh Birla, GM – RippleNet at American Fintech Ripple, who is currently involved in a U.S. Securities and Exchange Commission (SEC) lawsuit, recently published a blog post titled, âEvolving RippleNet for a symbolized future. “
Birla writes that cryptocurrency and blockchain or DLT are “more common than ever.” He points out that there is now “a palpable level of excitement for the crypto that is not showing signs of slowing down – tokenization is here to stay. “
Birla add that it is estimated that “at least” 46 million US residents today own cryptocurrency, and that many other countries are adopting this technology “at higher rates.” Big companies like Square, Robinhood, Visa, Mastercard, and PayPal “are firmly integrating crypto into their product stacks.” World-class DJs bring exclusive NFTs to their global audiences, âBirla writes.
He also mentioned that even reserve banks “are seizing head-first to the potential of crypto – around 80% of central banks are exploring use cases involving central bank digital currencies (CBDCs)”, with around 40% currently testing the proof of concept. (PoCs). In June 2021, El Salvador became the first country in the world to adopt Bitcoin as legal tender and in the United States, Miami “is taking steps to make the city a crypto hub,” Birla added.
He also mentioned that since the inception of Ripple, they have understood the great potential of crypto “to transform the financial system – from changing the way money flows around the world to settling near instant payments. down to the way we borrow and lend money through DeFi platforms. “
Birla also shared:
âIn 2012, when Ripple first launched, crypto and blockchain largely lacked the infrastructure, liquidity, and confidence to adopt them. There were only a few exchanges at that time making a few million dollars per year in volume compared to traditional exchanges like the Nasdaq with around $ 5 billion in volume per day. Fast forward to today, there are hundreds of exchanges around the world doing billions in volume every day. “
With this increase in adoption, there is a growing demand for tokenization, the use of digital tokens “to represent ownership of any type of asset (physical or not) on a blockchain,” Birla reveals while adding that tokenization “is transforming the way people buy, sell, track and manage assets – from art and real estate to intellectual property, stocks and supply chain goods.”
the World Economic Forum (WEF) estimates that 10% of global GDP will be “tokenized by 2027,” Birla noted while noting that with their years of experience working with financial institutions (FIs) on the use of blockchain-based solutions, Ripple is “uniquely positioned to partner with companies for this future.”
According to Birla:
âThere is no doubt that those who do not embrace these new technologies will be left behind. “
âRipple is evolving. We are moving from a cross-border payments network to a platform providing tokenized services that will bring crypto capabilities to the business and prepare them for a future where crypto is at the forefront. RippleNet was originally designed to solve the problems of speed, cost and transparency of cross-border payments for those who have been seriously underserved by the financial system as a whole. “
He added that on average, the fee for consumers to send funds across borders is 7% or a fee of $ 14 to send only $ 200. Likewise, SMEs experience very high costs and high expectations from their customers, writes Birla, noting that with fewer banks providing capital to SMEs since the 2008 financial crisis, these companies “are struggling. obtain credit to supplement their already limited working capital (around 70% of SMEs in emerging markets do not have access to credit, according to the World Bank).
He also mentioned that late payments to suppliers, employees or other essential partners abroad “can be very damaging to these businesses”.
He keeps on:
âWith RippleNet, payment service providers and midsize banks have a better way to compete and don’t have to pay huge fees that are inevitably passed on to their customers and don’t have to wait for days. for payments to be delivered. Liquidity on Demand (ODL) eliminates the need for pre-financing for cross-border payments by using XRP as a bridge between two currencies.
When the first players started using the product, it became apparent that the companies or businesses that would find the most value would be “PSPs and the first digital banks – these are the ones who specialize in remittances, the e-commerce and SME-type payments. – high volume, low value – which medium to large banks have long ignored, âBirla added. He also claims that ODL “fills a real need today – ODL’s volume was $ 2.4 billion in notional value on RippleNet in 2020”.
In October last year, Ripple introduced Line of Credit, an extension of ODL that allows RippleNet customers “to raise capital on demand to initiate large-scale cross-border payments using XRP â, noted Birla while adding that unlike incumbents who have a large balance that allows them to quickly develop their business, many fintechs and SMEsâ lack the capital and resources to compete â.
He also noted:
âBefore switching to RippleNet, they didn’t have access to the same services as traditional FIs and were overcharged for legacy systems – sometimes even using expensive venture capital funds to fund payment streams. We are constantly building to meet the needs of our current and future customers.
As customers were ready to move from fiat-only to crypto-based flows, Ripple was able to easily add new services and capabilities such as ODL and Line of Credit, Birla added while noting that in the future every customer will join RippleNet. with the same basic service and a wallet “designed to support both crypto and fiat”.
He explained that by adopting the wallet, customers can take advantage of the latest blockchain-based services that keep them “on the cutting edge of technology – the platform is designed to seamlessly upgrade and add new services. as customers want “. For the foreseeable future, customers could use their Ripple-powered wallet “to hold XRP, BTC, stablecoins and anything tokenized,” Birla confirmed.
âWe saw the idea of ââtaking a platform that can be built on working brilliantly with Cisco from the 80s – they first introduced networking into the business, then were perfectly positioned. when the Internet began to take off to easily build on this foundation. , providing customers with other services such as security tools and collaboration software. We do the same with RippleNet.
Customers choose to work closely with Ripple because they are “a trusted source of enterprise crypto that will help them grow and scale their business,” says Birla.
He also mentioned:
âWhen we launched ODL commercially in 2018, the payment flow required payments to be issued in fiat, converted to XRP, and then back to fiat currency in the destination country. Over the years, we have refined the ODL, streamlining the product to improve efficiency and experience.
Today, ODL customers are able to send XRP for cross-border payments directly through a cryptocurrency wallet, Birla explained while noting that they are able to mine their wallet “to procure gold. XRP on demand instead of through a third party. “
This gives customers greater flexibility and choice “while reducing friction in the payment flow,” Birla explained while noting that it also offers their customers the opportunity “to grow and evolve rapidly. with new partners and currencies, simplifying the onboarding process and enabling multiple currencies through a single wallet.
âFlashFX, an innovative payments technology company based in Australia, was founded on the belief that smart technology is the key to unlocking the potential of global payments. They are constantly on the lookout for new ways to integrate cutting-edge technologies to provide their clients with the most innovative services.
As an ODL customer, FlashFX is one of the first service providers to connect to a customer leveraging Ripple’s new ODL model, Birla revealed while noting that as such, they are now able to âSupport payments in GBP – a currency that ODL does not previously support – as well as payments in euros. FlashFX is just one example of a customer growing their business with Ripple products, âBirla noted.
He further revealed:
âThis follows an incredible global momentum for Ripple. The APAC region in particular is exploding with growth and opportunity thanks to progressive crypto regulation and innovative companies looking to seize the opportunity to become a leader in the crypto space.
For Ripple, we’re seeing some of our “biggest growth volumes here,” Birla revealed while noting that South East Asia transactions grew 10-fold last year, fueled by existing RippleNet customers and new connections.
New customers such as Novatti joins Ripple’s international payments network, using ODL “to enable payments from Australia to the Philippines, and we have acquired 40% of the leading cross-border payments specialist in Asia Tranglo to accelerate the expansion of ODL and line of credit in the region, âadded Birla. He also noted that as more companies decide to add crypto-based services, customers such as Novatti and Tranglo “play a vital role on the network as ramps and gateways. fixed output “.
He concluded :
âToday it is a question of when, not if, crypto will play a vital role in the future of financial services. This industry has grown at a rapid pace over the past decade and it is only gaining momentum. The future belongs to those who build bridges between the traditional financial world and the new paradigm of crypto and blockchain technologies. “