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AlexCobb

Why xRapid Might Be Adopted Faster Than We Think

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Posted (edited)
11 hours ago, 2ndtimearound said:

My theory is that xRapid clients will give each other liquidity if Ripple can add xRapid payment corridors in a logical way.

Yes that is how I see it working and it also seems to be the intention behind XRapid.  Vostor Nostro accounts become redundant because liquidity is provided by local exchanges and local banks.

Think about it:  You are a bank in Venezuela trading on XRapid - every few minutes a transaction takes place, dollars come in needing to be converted into Bolivars,  Bolivars go out needing to be converted into Dollars and Euros and Pounds.  You can push every transaction through a local liquidity exchange and have no knowledge of the XRP.  XRapid allows the bank to receive Bolivars and send out Bolivars without having to think about the conversions that happens at the other end of the chain.

But the Venezuelan could accept XRP as a currency and issue the Bolivars in exchange for XRP.  IT could also send XRP instead of sending dollars.  At the end of the day the bank has either have a surplus of XRP or deficit, but most of the day the incomings and outgoings have been cancelling  each other out.  At the end of the day the bank either buys or sells XRP to balance the books.    During the day there have been zero charges on these conversions but the bank can charge as if each had had to be be converted out of XRP into Bolivars or out of Bolivars into XRP  The Bank has become a new sort of business, a shared Vostro Nostro account on the XRapid network and made money on transactions that have mostly been cancelling each other out.  Installing XRapid has created a new money making machine for the bank.

 

Edited by Julian_Williams

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Posted (edited)
49 minutes ago, Julian_Williams said:

Yes that is how I see it working and it also seems to be the intention behind XRapid.  Vostor Nostro accounts become redundant because liquidity is provided by local exchanges and local banks.

Think about it:  You are a bank in Venezuela trading on XRapid - every few minutes a transaction takes place, dollars come in needing to be converted into Bolivars,  Bolivars go out needing to be converted into Dollars and Euros and Pounds.  You can push every transaction through a local liquidity exchange and have no knowledge of the XRP.  XRapid allows the bank to receive Bolivars and send out Bolivars without having to think about the conversions that happens at the other end of the chain.

But the Venezuelan could accept XRP as a currency and issue the Bolivars in exchange for XRP.  IT could also send XRP instead of sending dollars.  At the end of the day the bank has either have a surplus of XRP or deficit, but most of the day the incomings and outgoings have been cancelling  each other out.  At the end of the day the bank either buys or sells XRP to balance the books.    During the day there have been zero charges on these conversions but the bank can charge as if each had had to be be converted out of XRP into Bolivars or out of Bolivars into XRP  The Bank has become a new sort of business, a shared Vostro Nostro account on the XRapid network and made money on transactions that have mostly been cancelling each other out.  Installing XRapid has created a new money making machine for the bank.

Good post.  One thing is for sure: the idea that xRapid will somehow depend on retail investor liquidity is surely impractical.  Retail investor activity is unpredictable and xRapid needs on-demand, reliable liquidity.  Imagine when you have five or ten big xRapid clients using one payment corridor.  Their activity IS the liquidity.  The hard part is to get the ball rolling, but you can do it one payment corridor at a time. 

Edited by 2ndtimearound

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Just now, 2ndtimearound said:

Good post.  One thing is for sure: the idea that xRapid will somehow depend on retailer liquidity is surely impractical.  Retail speculator activity is unpredictable and banks need xRapid needs predictability.  Imagine when you have five or ten big xRapid clients using one payment corridor.  Their activity IS the liquidity.  The hard part is to get the ball rolling, but you can do it one payment corridor at a time. 

YES, one corridor at a time as is happening between the Japanese and Korean banks

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