Ripple (cryptocurrency)

Ripple is a global currency exchange and remittance network that aims to lower the cost and improve the speed of international bank transfers relative to legacy financial infrastructure. Also called the Ripple Transaction Protocol (RTXP) or Ripple protocol, it is built upon a distributed open source Internet protocol, consensus ledger and native currency called XRP (ripples). Ripple's consensus is based on the Federated Byzantine Agreement (FBA) -- a kind of middle ground between public, permissionless blockchains such as Bitcoin and private, permissioned blockchains such as Hyperledger Fabric.

Ripple was released in 2012, helping to enable "secure, instant and nearly free global financial transactions of any size with no chargebacks."

At its core, Ripple is based around a shared, public database or ledger, which uses a consensus process that allows for payments, exchanges and remittance in a distributed process. In 2014, Ripple defended the security of its consensus algorithm against a competitor; Stellar Network. Currently, Ripple is the third-largest cryptocurrency by market capitalization, after Bitcoin and Ethereum. Used by companies such as UniCredit, UBS or Santander, the Ripple protocol has been increasingly adopted by banks and payment networks as settlement infrastructure technology.

With the Ripple ledger, people can send and receive different types of fiat currency or cryptocurrency. XRP is the native currency of the ledger, but by preparing trustlines, in other words a trust relationship between two parties, two financial organizations or people can trade with multiple currencies, all on the Ripple ledger. In this way, banks can send money across the world in just seconds, not days. The foreign currency that is held on the ledger is in the form of an IOU. In addition, if one party sought to purchase a foreign currency from a party for which they have no direct trustline, Ripple provides a path-finding algorithm that connects the two parties through indirect trustlines. This mechanism is called 'rippling' and consumers who have multiple gateways in the same currency can 'allow rippling' on their account to receive a small transit fee for allowing inter-gateway liquidity.

Every Ripple wallet must have a minimum of 20 XRP and every transaction mandates a fee in Ripple. This helps to prevent flooding of the network from adversaries who wish to thwart it.

We See the Future of Global Finance

Unlocking the Power of Blockchain

The current global payments infrastructure does not meet today’s business or consumer demands. By unlocking the 
power of blockchain and digital asset technology, financial institutions can dramatically improve the speed, cost and reliability of how people transact around the world.

Creating an Inclusive Financial System

Our solutions unify the infrastructure underlying global payments. But it doesn’t stop there. Through the power 
of decentralized financial technology, institutions and the businesses and people they serve have access to an open 
and inclusive system no matter where they are in the world.

Accelerating the Internet of Value

This new era in global finance takes shape in the Internet 
of Value (IoV)—a world where money moves like information does today. Like the internet’s impact on information sharing 
and communication, the IoV will serve as an explosive catalyst for value exchange: spawning a new chapter in globalization, redefining entire industries and giving rise to new ones.

We Build Decentralized Financial Solutions for 
the Real World

Unique Technology

Ripple is the only enterprise blockchain company 
today with products in commercial use by hundreds of customers across 55+ countries. These businesses have access to alternative liquidity solutions through Ripple’s global network, which uniquely uses the XRP Ledger and its native digital asset XRP to help improve payments services worldwide.

ripple company photo 4

What Makes Us Unique

Collaborative Vision

We work within the existing financial system to improve not disrupt. This means partnering with customers to streamline their underlying infrastructure, not replace it, and working with regulators, governments and central banks to ensure that our solutions are secure and compliant.

Powerful Innovation

RippleX provides open-source code and developer tools to accelerate the building of efficient and interoperable blockchain technology—furthering innovation across global payments and beyond.

Ripple - People we serve

We Connect Businesses 
and the People They Serve

Together with our customers, we are building a more inclusive financial system.

Ripple’s global payment solutions are helping transform how vulnerable populations, remitters and small businesses worldwide, send and receive money across borders.

We are also proud partners of mission-driven organizations that are creating greater economic fairness and opportunity for all through research, education and philanthropy.

The Executor (Ripple) - Ripple is a technology company that provides the most efficient solutions for sending money around the world using the power of blockchain technology.

Today, Ripple is the only enterprise blockchain company with products for commercial use. Our global payment network, RippleNet, includes over 300 financial institutions in 40 countries and six continents. We work with regulators, governments and central banks, not against them, to improve the way the world moves money around.

By using blockchain and advanced APIs, Ripple allows financial institutions that are part of the RippleNet network to send money around the world, instantly, securely and in fractions of a penny. As part of RippleNet, we solve three key payment problems:

1. Speed and certainty.

2. Liquidity management.

3. Transparency

With RippleNet, customers can enter new markets quickly, expand their services, and deliver the best global payments customer experience to date. With a single connection, customers can access the best blockchain technology for global payments, payment capabilities in over 40 currencies, liquidity on demand as an alternative to pre-funding, and operational consistency through a common rule book.

The Financial Times defines liquidity in terms of how easy it is to exchange a security or instrument, or how easy it is to convert an instrument into cash for withdrawal. It takes into account the stability and price of each instrument in a transaction.

If a financial transaction is an engine with moving parts and many factors affecting its performance, liquidity is the oil that makes it move. Good, clean oil in the form of cheap and readily available liquidity means less risk and a faster, smoother transaction.

For normal domestic transactions, such as a debit card purchase or a paper check deposit, liquidity tends to be high because financial exchanges are usually in a single currency and are approved against the account balances held by each party in the transaction. But when you assess liquidity for international or cross-border transactions, the oil starts to deplete and the ratios deteriorate.

International transactions already face obstacles and delays because of country-specific rules and currencies. Exchanging one currency for another results in price and time changes that can affect pricing on each side of the exchange. This undermines transaction stability - hence liquidity - and increases risk and cost.

As a result, financial institutions must prefund nostro accounts on each side of the transaction in that country's local currency. These local currency account balances improve liquidity by reducing risk for transaction parties.

However, these accounts have a high cost. According to a 2016 McKinsey Global Payments report, there is an estimated $5 trillion idle in these accounts around the world, tying up capital that could be used more productively. They must also be actively managed to ensure that balances are commensurate with transaction volume.

The cost and complexity of keeping these accounts around the world is one reason why only a few banks can process global transactions. The burden of maintaining nostro accounts worldwide is simply unbearable for most organizations. Instead, small and medium-sized banks and payment processors pay a fee to use the international operating systems of their bigger brethren.

Digital assets can be used to reduce the cost and increase the speed of liquidity for these cross-border transactions. This is especially true in emerging markets, where exchange costs are high and trading volumes are low.

A digital asset designed for corporate use can take the place of nostro accounts and offer liquidity on demand. This is possible because the digital asset serves as a universal currency, instantly and cheaply translating any payment into the required local currency.

This capability not only lowers the cost of the entire transaction, but can also speed up real-time exchange. In this way, the digital asset becomes the oil or liquidity that determines the efficiency of transactions.

Banks and payment providers can then free up assets that would normally be destined to fund nostro accounts worldwide. Moreover, banks and payment systems that would not normally be able to make transactions on their own can now participate directly in international payments.

To be successful, a digital asset must be designed to calculate transactions quickly. For example, Bitcoin (BTC) is a great store of value, but it is poorly suited for transactions because it can take more than an hour to fully compute a transaction. It also has a limited throughput of 16 transactions per second (TPS).

In contrast, a digital asset such as XRP settles in seconds and can handle 1,500 TPS - a throughput on par with Visa and other network cards. This is because XRP was created specifically for corporate use to provide liquidity for international transactions.

Speed and volume are important factors. The faster the transaction, the better the sender is protected from the risks of instability and the faster the recipient receives the fully calculated funds. High throughput ensures a more stable exchange volume for all market participants.

Ripple's xRapid solution uniquely leverages XRP to provide liquidity on demand. By facilitating real-time, lower-cost transactions across currencies, xRapid reduces risk and unlocks the full potential of cross-border payments for enterprise customers.

xRapid is a service offered by Ripple that uses XRP cryptocurrency to speed up cross-border money transfers. Banks using xRapid have reported savings of up to 70% using the system, with transfers occurring within minutes rather than days using a traditional system.

Most of Ripple's 200 banking partners use a Ripple service called xCurrent . It uses blockchain technology to help banks make faster payments and communicate better.

But it doesn't use XRP to settle transactions.

Ripple intends to use xCurrent as a way to connect its banking partners before convincing them to switch to xRapid .

xRapid aims to make these transactions even faster and cheaper. The most important thing that makes the use of XRP settle the transfer of money.

XPR is used as an "intermediate currency" in this process.

Here's how it works...

Let's say Bob lives in the UK and wants to send £1,000 to Alice in India.

Using xRapid, Bob's bank instantly transfers the £1,000 to XRP via cryptocurrency exchange.

XRP is then instantly converted to Indian rupees via partner exchange in India.

The fees are virtually zero and the entire process takes seconds.

If Bob had used the traditional banking system, it would have taken days and cost him a big fee.

The above description is a very brief description of how xRapid works, but there is a reason it is so powerful:

Banks need liquidity (i.e., lots of free money) to earn foreign currency. And the current way of getting liquidity is extremely inefficient.

Let's go back to Bob and Alice. To send money to India under the traditional system, Bob's British bank needs a "nostro account" in India. The nostro account is pre-funded with millions in local currency. (This is liquidity).

Banks pre-fund similar nostro accounts in each country with different currencies to facilitate cross-border transfers. This is expensive and incredibly inefficient.

By switching local nostro accounts to digital cryptocurrency, there is no need for bank accounts filled with foreign currency around the world. It's faster, cheaper and more efficient.

To date, more than 300 financial institutions have joined the Ripple initiative worldwide. A large number of international payments are already being made using the new standard, giving banks and their corporate clients undeniable advantages. xRapid aims to improve payments between legal entities. The initiative is designed to help companies develop international operations, improve supplier relationships and improve cash flow control.

Thanks to the xRapid initiative, companies are already getting a range of options in settlement services today, such as:

- Same-day deposit of funds

- transparency of fees

- continuous tracking of payments (where they are and at what stage of execution)

- Remittance information remains unchanged

The xRapid initiative operates on the basis of a set of business rules stipulated in multilateral service level agreements (SLAs), which must be complied with by the participating banks. The new system is designed to meet the needs of corporate clients, while allowing banks themselves to comply with regulatory requirements as well as their obligations with respect to market, credit and liquidity risk. The system is built on the robust and resilient xRapid international platform. Any regulated financial institution that is part of the xRapid community and complies with the rules of the initiative is eligible to participate.