Why Banks Are Taking Notice

  • The role of XRP as a bridge currency in global finance is gaining traction.
  • Top Analyst uncovers key factors that can drive XRP’s adoption.

XRP, the cryptocurrency associated with Ripple Labs Inc., is often described as a bridge currency that can be integrated with the traditional banking sector. At the moment, there are heightened discussions on why banks should use XRP for payments.

Why Banks Are Taking Notice of Ripple

In an X post, crypto investor and analyst CryptoTank highlighted several reasons banks would use XRP instead of other digital tokens or a Central Bank Digital Currency (CBDC). First, the analyst pointed out that the traditional banking sector is competitive. He noted that smaller banks compete with larger banks like JPMorgan for market share and customers.

Therefore, he claims banks will be uninterested in accepting each other’s digital token or CBDC since doing so will give bigger rivals a competitive advantage. The analyst added that the smaller banks’ agreement could give bigger banks total control of how the tokens will be issued and used. Essentially, the analyst opined that the bigger banks could eventually exert tough conditions that might put smaller ones out of business.

CryptoTank’s second point hinges on liquidity. He emphasized how banks are desperate to get liquidity that is easily accessible, cheap, and with low to zero friction. He noted that the SWIFT network, developed as a payment solution for financial institutions, is still far behind in technology. The analyst stated that the network is slow, costly, and has friction, thus limiting its use by traditional banks.

CryptoTank highlighted that the fundamental idea behind the new financial system and the digital age is the seamless transfer of value. He added that the BRICS alliance was created by countries seeking freedom from the traditional banking system. According to the analyst, the United States and the United Kingdom have had authority over sanctions, which often caused financial harm to them.

Documents from the BIS, IMF, and WEF claim a neutral bridge currency is needed to provide a seamless transfer of value globally. This would avoid friction and failed transactions and allow banks to free up Nostro Vostro accounts.

Comparing XRP to XLM as a Solution to Financial Freedom

Many think Stellar’s XLM could be used for seamless value transfer instead of XRP. CryptoTank, however, pointed out that XLM was created for peer-to-peer smaller transactions and banking the unbanked globally and not as a bridge currency. 

On the other hand, he noted that XRP is not a utility token. The analyst describes XRP as a token created specifically for transferring huge amounts of value at a low cost, high speed, and without friction. 

The analyst highlighted how Ripple uses XRP as a bridge asset to move value for its On-Demand Liquidity (ODL). As noted in an earlier CNF post, wealth advisor Mickle claims demand for XRP among market makers will increase as global ODL transactions expand.

CryptoTank highlights Ripple’s partnership with the BIS, IMF, WEF, and central banks, further strengthening XRP’s case as the appropriate bridge currency. 

“Sitting at the head tables with the Global leaders of Finance and Banking. Crafting the rules, regulations, and how the new system will work…It doesn’t take a genius to see where this is going,” CryptoTank emphasized.


Recommended for you:

          No spam, no lies, only insights. You can unsubscribe at any time.

Source: https://www.crypto-news-flash.com/xrp-vs-traditional-banking-solutions-why-banks-are-taking-notice-of-ripple/?utm_source=rss&utm_medium=rss&utm_campaign=xrp-vs-traditional-banking-solutions-why-banks-are-taking-notice-of-ripple