In this issue of The Ripple Drop, we’ll delve deeper into liquidity. RippleNet General Manager Asheesh Birla joins us on how crypto liquidity works, why it matters, and the role that on-demand liquidity and Ripple liquidity hubs play in driving its growth. I will explain.
Increasing crypto liquidity
Asheesh tracks the growth of cryptocurrency liquidity from the early days of Bitcoin and why it is important, as it does not require a large bank or nostro account network to achieve liquidity. Keep in mind that cryptocurrencies are much easier to travel around the world than fiat currencies. This ability to easily exchange coins and fiat currencies is facilitated by cryptocurrency exchanges such as Coinbase, Bitso and Bitstamp.
Currently, Asheesh points out that hundreds of billions of dollars of cryptocurrencies are traded daily on these exchanges. This has increased dramatically since 2013, when the industry did not exceed $ 1 billion in liquidity each year.
“More liquidity [means] We can provide a better product experience. You can send cross-border payments at lower rates, “he says.
According to Asheesh, the amount of cryptocurrency liquidity doubles each year. This is a great precursor to customer savings and experience, especially in terms of cross-border payments.
Against this background, RippleNet celebrated its banner year in 2021.
According to Asheesh, RippleNet ends the year with a payment execution rate of over $ 10 billion, expanding its on-demand liquidity (ODL) products to 22 destination markets, and this milestone covers ODL with near-complete global coverage. Observed to bring to.
Asheesh attributed this rapid growth to two distinct advantages offered by ODL and the traditional Fiat movement and correspondent banking network: faster transaction speeds and more efficient use of capital. ..
He explains that the latter is important because rising interest rates could make capital even more expensive over the next year. Since ODL does not require prior funding, partners can avoid binding their expensive capital with a nostro account and extend ODL cost savings.
Continued growth in general crypto liquidity further strengthens this value proposition as it reduces basic transaction costs and makes it cheaper to send money faster and more efficiently using ODL. ..
Liquidity hub for business
The success of ODL also underlies our idea of launching Ripple Liquidity Hub, an enterprise product previewed at Swell. It has been used for nearly two years for internal liquidity management as part of ODL products.
Asheesh is a clear leader in provisioning cryptocurrency liquidity through third-party market makers, helping companies leverage our expertise to deliver a variety of digital assets (Bitcoin, Ether, etc.) to their clients. He says he started asking. Ripple Liquidity Hub is a natural evolution of both these conversations and existing RippleNet products.
Ripple aims to provide a somewhat similar solution for liquidity that works behind the scenes, as compared to Google Flight or Kayak’s way of aggregating prices from multiple venues to book a trip. increase. Ripple Liquidity Hub builds on the existing Ripple infrastructure and integrates across multiple liquidity venues such as exchanges, OTC desks and market makers to enable businesses to procure digital assets at optimal prices. .. It enables simple integration for turnkey experiences and enables Ripple partners to quickly provide their customers with the ability to buy, sell and hold crypto in a deep liquidity pool.
The response was overwhelming, says Asheesh. Potential customers are excited about the outlook for the Ripple Liquidity Hub as they rely on Ripple’s expertise and track record to simplify what would otherwise be a difficult proposal.
Asheesh predicts that 2022 will be another big year for RippleNet and its products. In particular, he is energized by a conversation with the RippleX team about NFT opportunities for RippleNet customers. He sees possible collaboration as an example of our commitment to always anticipate the following with corporate cryptocurrencies:
Want to hear more? For more information on these projects, see the latest episode of The Ripple Drop.