Quick overview

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Ripple revealed that the digital asset XRP and blockchain technology could help address some enduring issues with international payments, such as those about the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system.

The company brought attention to the vulnerability of traditional systems, which still primarily rely on manual processes for international money transfers: Most cross-border payments still use a manual framework.

Transactions may fail due to an incomplete payment instruction, an incorrect SWIFT code, or a typo in the account number.

Delayed payments can lead to expenses, operational difficulties, and strained relationships with partners or clients waiting for money. To reduce these risks, Ripple pointed out that increasing automation and decreasing manual touchpoints are crucial.

The cryptocurrency company noted that these antiquated systems are prone to errors, delays, and a lack of transparency because they usually rely on numerous intermediaries and correspondent banks.

Payments may go through up to five institutions before arriving at their destination, creating uncertainty and raising costs. According to Ripple, this system is not up to speed with the demands of contemporary global business and the speed of commerce.

Exchange rate markups, inconsistent messaging standards, and complicated regulations add to what the company calls a risky and ineffective cross-border transaction ecosystem. Ripple positioned its blockchain-powered Ripple Payments solution as a cutting-edge substitute. According to the company,

“Ripple Payments provides a cross-border stablecoin payment solution that is a contemporary substitute for conventional cross-border payment systems.” It makes use of blockchain technology as well as digital assets like XRP and stablecoins.