24 April 2018
https://www.avoka.com

Ripple boasts it can slash banks' global settlement costs

23 February 2016  |  8209 views  |  0 Binary

Ripple claims that its network and native currency could save banks up to 60% on costs associated with global interbank settlements.

While distributed ledger technology is routinely hailed as a potentially huge money saver for banks, hard figures are tricky to come by. Ripple has now crunched some numbers for its own offering and, perhaps unsurprisingly, found that it could help cut settlement costs dramatically.

"By matter of enabling instant, point-to-point settlement, Ripple reduces these liquidity requirements. And by matter of providing end-to-end visibility into each settlement, Ripple compresses payment operational costs associated with reconciling exceptions and failures," says the firm.

By using the Ripple network, a respondent bank can save 33% on international payments thanks to a 65% fall in liquidity costs, 48% drop in operational costs and 99% fall in Basel III expenses, according to the company's modelling.

Savings are ramped up if banks use Ripple's "native digital asset", XRP, as a bridge asset. By ditching nostro accounts for local currency for one consolidated XRP account, banks can allocate less total liquidity to service the same volume of international payments.

"As a result, respondent banks that use Ripple with XRP as a bridge currency can save up to 42 percent on costs today and up to 60 percent as XRP gains usage and volatility decreases," claims the paper (PDF).

KeywordsBASEL

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Ripple to create Asian joint venture with SBI Holdings

Ripple to create Asian joint venture with SBI Holdings

29 January 2016  |  8808 views  |  0 comments | 15 tweets | 4 linkedin
Microsoft blockchain-as-a-service embraces Ripple

Microsoft blockchain-as-a-service embraces Ripple

08 December 2015  |  19533 views  |  0 comments | 58 tweets | 38 linkedin
Earthport opens gateway to distributed ledgers with Ripple

Earthport opens gateway to distributed ledgers with Ripple

18 August 2015  |  12236 views  |  0 comments | 26 tweets | 20 linkedin
CBA to test Ripple for intra-bank transfers

CBA to test Ripple for intra-bank transfers

27 May 2015  |  15455 views  |  2 comments | 27 tweets | 22 linkedin
Ripple scores $28 million funding round

Ripple scores $28 million funding round

19 May 2015  |  10258 views  |  0 comments | 17 tweets | 17 linkedin
Ripple signs first two US banks

Ripple signs first two US banks

24 September 2014  |  16572 views  |  5 comments | 18 tweets | 10 linkedin
Ripple price plunges on co-founders sell-off plans

Ripple price plunges on co-founders sell-off plans

23 May 2014  |  7463 views  |  0 comments | 6 tweets | 2 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
Visit www.abe-eba.euVisit http://response.ncr.comVisit www.nextgenbanking.co.uk

Top topics

Most viewed Most shared
Top tier banks pass first transactions on trade finance blockchainTop tier banks pass first transactions on...
14439 views comments | 20 tweets | 28 linkedin
TransferWise becomes first non-bank to open settlement account with BofE RTGSTransferWise becomes first non-bank to ope...
11338 views comments | 18 tweets | 32 linkedin
'Fake data' will make banks vulnerable - Accenture'Fake data' will make banks vulnerable - A...
9492 views comments | 26 tweets | 36 linkedin
Major card schemes zero in on single 'buy' button for online commerceMajor card schemes zero in on single 'buy'...
8642 views comments | 20 tweets | 36 linkedin
Irish central bank tunes in to fintechIrish central bank tunes in to fintech
8577 views comments | 20 tweets | 21 linkedin

Featured job

Competitive base + commission + benefits
UK or Germany

Find your next job