- Former banking expert believes XRP is on track to make banking system obsolete.
- Reiterates the importance of DLT in streamlining banking activities.
Financial expert and ex-banker Kyren recently shared his thoughts on how the Ripple-associated token XRP could disrupt the payment systems of the world. From his four years of experience in the banking sector, Kyren shared what he believes would be the challenge XRP will pose to existing payment systems.
To begin with, the former banker acknowledged XRP’s capacity to perform better than existing cross-border traditional systems in terms of speed and cost.
Most times, international payments take as much as two days to be completed, plus the exorbitant transaction fees that could reach $50 sometimes. To put it in perspective, Kyren highlighted that legacy banking is incredibly slow and inefficient compared to XRP which offers swift and cost-effective cross-border settlement globally. With these functionalities, there is a possibility that Payment Service Providers (PSPs) and Nostro accounts will become obsolete if XRP goes mainstream.
These PSPs include but are not limited to top payment giants like Mastercard, PayPal, and Visa. On the other hand, Nostro accounts which are maintained by banks, lock funds to ensure liquidity during cross-currency transfers. Kyren believes that the presence of XRP will kick out such Nostro accounts for performing large transfers. Due to its capacity, XRP is deemed a better alternative which serves as a bridge asset between several currencies.
Ordinarily, cryptocurrencies permit the transfer of funds between people from one region to another. With digital assets, the need for intermediaries like PayPal and Mastercard which charge high fees for transactions, is reduced to the barest level.
Beyond XRP, Kyren pointed out other crypto like Stellar Lumens (XLM) and WadzPay (WTK) that are being applied in the banking sector. Ultimately, he clarified that cryptocurrencies like XRP, XLM, and WTK offer much-needed efficiency in the finance sector.
“I can’t wait to see how blockchain begins to change the payments landscape. One day in the near future, we’ll operate in a financial system that’s secure, instant, and efficient,” Kyren said in a statement
DLT, XRP Change the Outlook of Cross-border Settlements
Generally, the former banker acknowledged the full potential of Distributed Ledger Technology (DLT) and its capacity to streamline banking operations. He reminisced on his time as a banker, citing that most of his responsibilities involved manually updating payment ledger systems. Fast forward to the present day, it looks like DLT is equipped enough to perform those operations without a hitch.
Ripple seems to be getting the recognition it deserves as a payment platform that effectively conducts cross-border settlements and other functionalities. The prominent fintech company recently received two awards at the Future Digital Awards for Fintech & Payments 2023 for the “Sustainability in Fintech Innovation of the Year” as well as in the “CBDC Innovation” category.
Since Ripple Labs’ partial victory against the United States Securities and Exchange Commission (SEC), the XRP token has made a major comeback. Several entities are beginning to adopt the coin as they perceive its potential, especially in the area of cross-border payments.
