Ripple has projected that banks that use the Ripple network and its native cryptographic token XRP for cross-border payments can save up to 42% when compared against today’s options.
The findings are part of a new 15-page report issued today by the distributed ledger technology (DLT) startup. Entitled "The Cost-Cutting Case for Banks", it finds Ripple offering clarity as to the cost-savings its products can realize for the first time.
Further, the report projects respondent banks using Ripple without XRP can save 33% on international payments, with savings being generated by a 65% reduction in liquidity costs, a 48% drop in payment operations costs and a 99% decline in Basel III compliance costs. The release comes at a time when blockchains and distributed ledgers are being widely touted as having the potential to bring new efficiencies and savings to a variety of industries, particularly finance. However, there has been a lack of information as to the levels of such savings the technologies can achieve, largely since most projects are still in development or are being built behind closed doors.
Ripple instead has the advantage of experience working with financial institutions including a number of banks , as well as Western Union , Japan’s SBI Holdings and global payment hub Earthport .
Still, the projected figures are based on "model assumptions", meaning its unclear how the report was informed by any real-world data about its clients’ use of the service. Support for XRP
Perhaps most notable about the report is its implications for XRP, the cryptocurrency that is used to facilitate trades on the permissioned Ripple DLT system and that trades on an open market on digital currency exchanges.
More recent Ripple announcements have found the company largely glossing over the role of XRP in its system. For example, the Interledger protocol, released in October, […]
