Ripple head of banking Marjan Delatinne recently said that banks are reluctant to embrace the XRP-powered product xRapid due to lack of regulatory clarity.
He gave reasons why non-financial institutions are more interested in using xRapid to process cross-border payments than banks.
“Just to make clear, no banking institution is using that, because as you’ve probably heard about, the regulatory framework around the usage of digital assets is not very clear for banks. But payment service providers and some other financial institutions are less governed by these obligations.”
Marjan highlighted the use cases of the Ripple (XRP) digital currency in regards to the xRapid product. Using an illustration of somebody sending money from the United States to Mexico, Delatinne said that one of the primary use cases Ripple feels highly passionate about is the cross-border settlements.
“Let’s imagine you are in the US. You have $100, and you want to send that to a user or someone in Mexico. So you go to the crypto exchange, you exchange $100 to XRP. And immediately after the XRP is converted back to Mexican pesos and it is delivered either to the local or to the financial institution that has an account with the crypto exchange.
So this is actually changing the way that the current liquidity is managed… So this product, I think, is somehow the ultimate way that we see that crypto assets can help build the global economy by using the costs associated to the liquidity management.”
In October, Ripple launched the commercial application of xRapid product during the Swell 2018 conference in San Francisco.
xRapid is designed to use Ripple’s native token XRP to facilitate instant cross-border transactions between banks. The product is unique from the company’s other blockchain-based product known as xCurrent, which has already been adopted by some major financial institutions.
One of the largest banks in the United States PNC Bank joined RippleNet in September this year in order to facilitate cross-border settlements for its clients using an xCurrent product. Therefore, Ripple hopes that many xCurrent users including PNC Bank will eventually switch to xRapid.