Results of the first pilot tests conducted by blockchain startup Ripple (XRP) on the xRapid system have been revealed. According to the report there were significant savings as well as reduced transaction times that were enjoyed by those who participated in the pilot. The results showed that participating financial firms saw savings that ranged between 40% and 70% relative to what is usually charged by other foreign exchange providers.
While it typically takes between two and three days to settle a payment across borders, with xRapid it took just a little more than two minutes. On the XRP Ledger the transactions consumes between two to three seconds while the rest of the stages which include moving the funds through local payment rails and digital asset exchanges takes the rest of the time.
Speed and scalability
?It?s encouraging to see positive xRapid results because they validate what many in our industry already know: certain digital assets have utility. XRP?s utility lies in its speed and scalability, which makes it the perfect fit for cross-border payments,? Asheesh Birla, Ripple’s senior vice president of product, said.
According to Birla the number of transactions that XRP Ledger can handle in a second is 1,500. The financial firms which were participating in the pilots were testing transactions being carried out between the United States and Mexico. Sending of money from the United States to Mexico is not only popular but also a competitive market. Thus providers of payment services are seeking a competitive edge by reducing costs and quickening the speed of payments using xRapid.
Slow and expensive
Before the coming of xRapid providers of payment services were required to use a correspondent banking network or pre-fund bank accounts. Besides being expensive and slow it also tied up capital in cases where they were required to pre-fund bank accounts before the transaction could be concluded.
One of the firms participating in the pilot test was Viamericas. The chief executive officer and co-founder of Viamericas, Paul Dwyer, revealed that the pilot results were pleasing as it was clear that xRapid had lowered liquidity costs. Other firm that participated in the pilot tests was Mercury FX.
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