In our previous article, we discussed Ripple the organization and its proprietary digital asset, XRP, highlighting the benefits it may bring to institutions globally. Our focus shifts to a deeper understanding of XRP and its core system. Specifically, we will investigate how its unique design can potentially enhance and streamline the operations of traditional banking structures.
So let's dive deeper and examine the transformative potential of XRP in the realm of banking.
SWIFT & the Traditional Banking System
Under the existing banking system, institutions handle worldwide transfers using the SWIFT protocol. The SWIFT protocol, commonly referred to as the Society for Worldwide Interbank Financial Telecommunications, is a system used by financial institutions to send and receive information, such as money transfers, in a quick and secure way.
As this system is widely used for global financial transactions, it suffers from inevitable delays in the finalization of transactions and efficiency. It also carries hefty fees associated with international transactions. To add to this, such inefficiency and cost issues could hinder the smooth flow of international trade and limit the opportunity for widespread financial inclusion.
Because of the costly and inefficient transaction system with SWIFT, an alternative solution may be needed.
Ripple & XRP
Ripple and XRP have stepped up to tackle the issues facing global transactions in the conventional banking system. This protocol aims to reduce the need for banks and other payment providers when sending money internationally, focusing on improving both efficiency and cost-effectiveness.
Ripple contains a global payment solution called Ripple Network (RippleNet), utilizing the blockchain XRP Ledger (XRPL), where XRP transactions reach consensus in as little as 3-5 seconds, only using a small fraction of energy.
Are Ripple & XRP the Future?
Numerous individuals and investors have displayed significant faith in Ripple and XRP, particularly due to their potential capacity to revamp traditional banking systems. This asset and its accompanying technology is viewed by some as revolutionary, capable of redefining the operation of banking infrastructures.
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Create an account or log-in today to start buying and selling through your tax-advantaged IRA.
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