In a recent interview, Ripple’s APAC Policy Director, Rahul Advani, talked about RippleNet’s on-demand liquidity (ODL) service using the digital asset XRP.
Advani’s comments were made during an interview with financial news platform Bread.
When Ripple was asked how to “adapt to the growing demand for crypto-based cross-border payments,” he replied:
“”The big problem that RippleNet solves is in today’s banking system. There are significant liquidity issues and much capital is tied to upfront financing.Ripple solves that problem with a solution called On-Demand Liquidity (ODL)...
“”Customers can leverage the digital asset XRP as a neutral bridge asset between the two currencies. This eliminates the need for upfront funding on the destination account, significantly reducing capital overhead and operating costs.“”
Regarding his “thoughts on the development of the CBDC in APAC countries,” this was what Advani had to say.
“”I think it’s pretty clear that APAC sets an example for both retail and wholesale CBDCs.
“”However, in the future, central banks will need to address interoperability challenges with respect to cross-border payments. If each country is creating their own digital currency, simply recreate the same siled system that they are currently using. This means that countries will not be able to use each other’s CBDCs.
“”Therefore, interoperability is important here to facilitate cross-border transactions. And this is where neutral bridge assets like XRP, an open source, public and decentralized digital asset, can continue to play a role. Therefore, what you see in ODL’s XRP, which acts as a neutral bridge between currencies, is the same use case for CBDCs where ODL can be used as a neutral bridge between CBDCs.“”
The views and opinions expressed by the author or those mentioned in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing or trading crypto assets carries the risk of financial loss.
Featured images via pixabay.com by “ronymichaud”