In a recent Federal Reserve Bank Atlanta Policy Hub captioned “An Introduction to Web3 with Implications for Financial Services,” XRP was mentioned as an “international payment medium.”
The report reiterates the relevance of Ripple’s business model as it uses XRPL to meet cross-border settlement needs at a low cost.
XRP Facilitates Cross-Border Settlements
The XRP Ledger operates as an efficient institutional and cross-border payment medium with low-cost transactions of $0.0002 at a speed of 3-5 seconds.
The network is also scalable completing 1500 transactions per second and boasts of green attributes stemming from its carbon-neutral and energy-efficient operations.
While the report focused on bolstering the effect of Web3 on financial services, the Atlanta Federal Reserve Bank also mentioned the relevance of XRP and Stellar network in value transfers.
According to the report, XRP is “roughly envisioned as an international payment medium or wholesale settlement coin.”
It further mentioned how XRP and Stellar blockchains facilitate cost-effective value transfers, just like the proof of concept, Project Mariana.
Project Mariana was jointly introduced in November 2022 by the Bank for International Settlements (BIS), the Bank of France, and other Financial Institutions.
The institutions aim to achieve “efficient cross-border settlements in the traditional finance system using DeFi built on public blockchains using smart contract protocols to automate markets for cryptocurrency and digital assets.”
As such, they introduced the project to explore using Automated Market Makers (AMMs) for foreign exchange trading and settlement. In its announcement last year, the BIS disclosed the conclusion will be published in mid-2023.
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Author: Eli Dambel
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