Using the existing banking infrastructure, it takes two to three days for transactions to be processed across borders. Fortunately, Ripple is working on a solution.
According to the pilot project, financial institutions can save 40-70 percent on transaction fees by using the xRapid network instead of traditional methods. The transaction from the United States to Mexico took only a few minutes. xRapid significantly reduces the cost of global exchange and greatly improves transaction time.
The actual transfer of XRP across borders takes just a few seconds – but the transfer of XRP for fiat currencies takes a little longer. In this case, the US bank first sent USD to a gateway (exchange), where it was converted to XRP. Next, the XRP was sent to a stock exchange in Mexico, where it was exchanged for pesos.
Bitcoin trader needed
Ripple relies on third-party exchanges to convert XRP to Fiat currency. Rather than rely on today’s slow banking infrastructure, Bitcoin trader selects the exchange that is best prepared to facilitate trading.
“FINANCIAL INSTITUTIONS USING XRAPID HAVE BEEN ABLE TO SAVE 40-70 PERCENT OFF WHAT THEY NORMALLY PAY FOREIGN EXCHANGE BROKERS. AN AVERAGE XRAPID PAYMENT TOOK JUST OVER TWO MINUTES COMPARED TO TODAY’S AVERAGE OF TWO TO THREE DAYS FOR CROSS-BORDER PAYMENTS”.
Replace SWIFT according to onlinebetrug
SWIFT, also known as the Society for Worldwide Interbank Financial Telecommunication, is the primary network used by banks worldwide to conduct international money transfers, says onlinebetrug. SWIFT is currently used by more than 10,000 financial institutions in 212 countries. Read more on: onlinebetrug
If a US bank wants to send money to a Mexican bank, the Mexican bank must have USD and the US bank must have pesos. The same applies to banks worldwide – but not all banks have any kind of currency. Sometimes the US bank must first send funds to another bank before a transaction is finally forwarded to Mexico.
Obviously, it can be a long and complicated process. Ripple describes himself as a global exchange and a universal medium of exchange for cross-border payments. If XRP is adopted by institutional banks and governments, it could drastically reduce international transaction times and exchange fees.