We can stream live video from the space station in orbit, but sending a payment to a different country still takes days to settle. Despite the development of the Internet and huge advances in the movement of information, sending money around the world is a slow and often frustrating process.
Modernizing global financial services infrastructure with blockchain technology promises dramatic payoffs: Improving the speed and cost of cross-border payments could provide trillions to the global economy while enabling greater financial inclusion and lower barriers to entry in global commerce.
Today, we’re a step closer to realizing these goals with xRapid. It eliminates delays in global payments while also dramatically lowering cost. xRapid leverages the technology behind the digital asset XRP, to make cross-border payments truly instant. Aggregated results from several pilots for xRapid are now available.
For payments in the critical remittance corridor between the U.S. and Mexico, financial institutions using xRapid saw a savings of 40-70 percent compared to what they normally pay foreign exchange brokers. An average xRapid payment took just over two minutes, compared to today’s average of two to three days when sending cross-border payments. The portion of the transfer that relies on the XRP Ledger takes two to three seconds, with the additional processing time attributed to movement across the intermediary digital asset exchanges and local payment rails.
A payment journey with xRapid looks like this: a financial institution connects directly to digital asset exchanges in both the originating and destination corridors. The originating currency is exchanged into XRP which provides the necessary liquidity to power the final payment, and then in seconds that XRP is exchanged into the destination currency in the second digital asset exchange. Once this transaction takes place, the funds are sent out on the local rails of the destination country for payout. The transaction is tracked end-to-end, and the result is a cross-border payment that is cheaper and faster than ever before.
This is the realization of the vision for an Internet of Value — allowing for a new fluid movement of money that will benefit the entire global economy, from families that rely on remittance payments, to corporations looking to expand and scale into markets in new countries.
The possibilities for the global economy are endless, and we’re excited to see the Internet of Value realize its full potential.