Ripple customers looking to utilise the firm’s on-demand liquidity capabilities are not impacted by fluctuations in the company’s crypto asset, XRP, according to its global head of banking, Marjan Delatinne.
“[T]he technology is designed to cater for the requirements needed for high volume low value payments, so the exposure on the FX trades is much less than for normal FX transactions. It’s a bridge currency to convert from one fiat to another so exposure is nothing more than a few seconds.”
Delatinne was speaking on the sidelines of Swift’s Sibos event in London last week and just a few days after XRP dropped 16 percent during a single trading session in a crypto market wide drop, before recovering. Clients of RippleNet – the XRP and blockchain-enabled payment network - need not worry, according to Delatinne.
“[Y]ou don’t see a fluctuation as such in terms of a rate exposure. The technology is highly scalable, it’s very fast, it’s a fraction in terms of the costs, or major problems in terms of the typical issues other crypto currencies are currently facing.
In June this year, Ripple announced a partnership with MoneyGram, in which the US-based money transfer company will oversee the firm’s cross-border payment and foreign exchange settlement requirements. Delatinne considers the move as part of a wider trend among payments firms to make the system much more efficient.
“The intention of improving the remittance business and the cost for remitters I think is a good intention, and the use case of MoneyGram is a really good use case for that – everyone wants to reduce costs for the end user,” she said. “I think there’s a clear agenda worldwide for that.”
Recently, regulators have set about helping shape the growing payments landscape, with the US Federal Reserve announcing plans in August to launch a new real-time payments settlement service, FedNow. For Delatinne, it’s a natural progression in the US.
“The project is very interesting, it is aligned with everything that’s happening everywhere else – like in Europe where the ECB has launched a new settlement platform,” she said. “There’s some questions around how central banks will manage a relationship because today the exchange of flows at least in the European context is between the banks, ACHs, CSMs, and the central banks, and I think creating a new real-time rail in the US market makes full sense.”
“For us the more local markets initiate real-time rates is better for us because we can then really extend the reach of our existing banks to the rest of the market and bring a complete end-to-end real-time experience,” she added.