Security of payment transactions is utmost important. These transactions must be encrypted to provide full safety. Cryptocurrency, digital asset, works as a medium of exchange which uses robust cryptography. It helps in securing financial transactions, and in verifying the exchange of assets. XRP is one of the crypto currencies. It is used on ripple technology platforms which is real time gross settlement (RTGS) system.The main purpose of this technology is to connect various payment systems together and this technology or network is also called as XRP ledger. It has become popular because of its reliable track record.
US Companycalled Ripple Labs has developed XRP. XRP, digital asset, stands for X rapid. It is introduced mainly to support international financial deals. It is designed with specific and clear purpose i.e. transfers ofvalue.
It is little difficult to buy XRP than Bitcoin due to non availability in popular applications. You may need to buy Bitcoin first and then get them converted into ripples. If you have no Bitcoins added to your wallet yet, you can approach exchange like Coinbase to buy Bitcoins.
It is used by financial institutions and payment providers as liquidity tool. It helps them in minimizing liquidity cost as they do not need to maintain pre-funded local currency nostro accounts. As liquidity costs are excessive, it helps the banks a lot in cost reduction. Using XRP, payment providers extend their operations into new marketsand also able to provide quick payment deals. It also helps them to lower their foreign exchange costs.
For example, if an Indian company needs to pay to their supplier in Mexico, either Indian company should open an account in Mexico ad keep the funds in it or it has to approach some financial institution who provides foreign exchange. This entire process is lengthy and it takes lot of time.
But, using XRP, Indian company’s bank or payment providerlet the company to complete payment process right away or on demand. This way, it saves the company from foreign exchange fees. It eliminates the need to maintain pre funded account in Mexico in the above case. So, XRP helps in low cast and faster settlement.
XRP is highly scalable one.Unlike Bitcoin, which can process only seven transactions per second, XRP has the ability to handle thousands of transactions per second. It is not about replacing government supported currencies like Bitcoin. It acts as bridge cash and efficiently works with fiat currencies.
All XRP transactions will occur as well get recorded on XRP Ledger. XRP ledger has been made very strong and there is no single incident of failure so far.
Due to advantages that XRP offers, it is considered as the best digital payment method.