Reasons why I believe the legacy cross-border payments system is broken and the future solution to the problem.
For example, if you send $150+ dollars from Canada to Japan
The bank charges you a $50 transaction fee. (which is expensive to third world countries)
Second thing they tell you is money doesn't move on weekends or holidays..
So you ask when will the other side get their money?
Sir, we do not have end-to-end tracking on cross-border payments. It's up to the receiving party to let you know when they get it.
What? It's 2021...
We can send an email across borders instantly why not money?
The answer is legacy swift system uses the correspondent banking system.
Your payment travels through multiple banks ledgers, going through the clearing process which can take days. KYC + AML processes.
The longest I have had to wait for the payment to go through was 10 days as I sent money just before a long weekend...
This shows why the legacy system needs a revamp.
We need an instant settling payment system to prevent a FUTURE liquidity crisis. ex 2008
#liquidity #problems
This correspondent banking system is a centralized system that was created in the early 1900s, It has high fees, and slow transaction times and a 7% fail rate which costs banks billions of dollars a year.
The solution is moving value through tokenization.
One of the technologies we can use for inter-banking payments that would provide a cheaper, more secure faster settlement option, is a digital asset called XRP that was created in 2012 and has closed 66 million transactions with 0 downtime. Which is used by 40+ banks globally.
XRPL is a decentralized blockchain network that is carbon neutral. It runs 24/7 365, solves the double-spend problem and only costs .0001 XRP per transaction. This provides a system for cheap fast money transfers.
XRP is a deflationary closed-loop network. There were only 100 billion XRP ever created, no more can be minted or mined. The US dollar is inflationary because they print more supply out of thin air. Which is robbing cash users of their purchasing power with inflation. $XRP #IoV
How is XRP helping and changing the banking industry?
Let me show you some examples..
Cost Reduction, Settlement Times, End to End Tracking.
XRP helps create an Internet of Value, making money move like email does today. #xrpcommunity
The Inter Ledger Protocol was built using XRP.
The ability to move value between any ledger globally.
With minimum code and fully transparent. Bill gates Mojaloop uses ILP.
#Interledger #ILP
Who else uses Interledger protocol?
Bank Of England. @bankofengland
FNA @FNALab
More will be added to why I believe XRP players a huge roll in the new financial system.
Thank you for reading and I hope you enjoy
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