In a recently released video by Money20/20, Chris Larsen, the Co-founder of the leading blockchain firm, Ripple spoke about the liquidity problems that exist in the financial realm. He stated that digital assets are imperative in solving liquidity-related issues as trillions of dollars are sitting inactive to provide liquidity.
He started by addressing the financial crisis of 2008-2009 and stated that the world still does not have a solution for preventing the next collapse. This is where he mentioned digital money to be the key to unlocking solutions to the problem. In his words:
“10 years out on the financial crisis we still don’t have the infrastructure perhaps to prevent the next one and I think this is where digital assets can really help because an efficient digital asset can really solve some of the key problems in global liquidity.”
Larsen commented on the movement of money around the world, implying that the processes are outdated. He also mentioned Ripple’s native token XRP as an efficient asset to reduce the inactive capital sitting in trillions in the world. This will further allow an easy and instant movement of money as the banks, payment providers and enterprises will be enabled to make transfers without having the money pre-positioned all over the world.
“The world’s got trillions and trillions of dollars tied up in liquidity just to get around how clunky the movement of value is around the world. If with a really efficient digital asset something like XRP. That’s what we believe will be the most efficient, you can now reduce trillions and trillions of capital from being tied up.”
xRapid is a product that was built by Ripple to ensure cheaper and faster cross-border payments for the users and was released recently into the commercial market. It uses XRP as a bridge currency to provide liquidity at low costs and settle transactions. Furthermore, the product also eliminates the requirement of a nostro account for cross-border remittance.
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