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Exchanges with XRP autobridging? (Aka "I"m not going to spill the beans just yet")

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On 1/20/2017 at 4:17 PM, JoelKatz said:

Amazingly, so long as the two exchanges are regulated, there doesn't seem to be significant regulatory obstacles to the banks doing this

This would imply that any cross-border fiat currency exchange taking place on a currency exchange using XRP as the instrument would mean that each country would need to have it's government requirements met with respect to the exchange being regulated. For example, India, Japan, Saudi Arabia, Mexico, South Korea, etc would have to have their government regulations apply on the exchange where the currency exchange is taking place. A single exchange would need to meet the regulatory requirements of dozens of countries. This may be why it is going to take so long for XRP to gain liquidity.

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Nice bump @zerpdigger...

Seeing Korea come out of nowhere to light up the volume, has had me wondering why... 

I don't believe the crazy Korean volume is because the Koreans are a bunch of gamblers or that they like to trade for small %'s more than any other country.

I have been thinking with the strict currency inflow / outflow regulations in Korea, the huge volumes are directly related to this topic. 

Looking at the below link, the top two South Korea Remittance received by origin country(US and Japan),  have the strongest XRP markets(besides Korea) ... 

https://countryeconomy.com/demography/migration/remittance/south-korea

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27 minutes ago, JoelKatz said:

Fortunately, it's not nearly as hard as you might think. The payment looks like this:

1) Originator

2) Originating FI

3) Exchange that does the "to XRP" part

4) Exchange that does the "from XRP" part

5) Destination FI

6) Recipient

1, 2, and 3 are already in the same region. So there are no issues with them doing business with each other.

4, 5, and 6 are already in the same region. So, again, no issues there.

2 and 5 already know how to put together a compliant payment flow that crosses the two regulatory regions. They already ensure that 1, 2, 5, and 6 meet the regulatory requirements for both regions. So no issues here either.

3 knows that 2 is compliant with the regulations in its region. 3 knows who is receiving the fiat and who is supplying the XRP. 3 knows that 2 has ensured the compliance of 5 and 6.

4 knows who is receiving the XRP and who is supplying the fiat. 4 knows that 5 is compliant with the regulations for its region and has already ensured the compliance of 1 and 2.

This leaves shockingly few regulatory issues left. It turns out not to be nearly as difficult as you might imagine.

 

Is the reluctance of banks to use XRP due to them still being in the education phase / the space being underdeveloped, or is using digital assets a regulatory concern for FIs?

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30 minutes ago, JoelKatz said:

I think it's been changing and it's different things for different banks. Right now, there is a lot less resistance from FIs than you might think and it's going to come down to us being able to put together a package of products and services that works for them. We're finally at the point where we are starting to do that with XRP.

That's nice to hear. Are FIs are willing to work with liquidity providers so long as the end result is cheaper payments and if so, do you think liquidity providers will eventually be cut out once the order books are deeper (less prone to slippage)?

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4 hours ago, JoelKatz said:

Fortunately, it's not nearly as hard as you might think. The payment looks like this:

1) Originator

2) Originating FI

3) Exchange that does the "to XRP" part

4) Exchange that does the "from XRP" part

5) Destination FI

6) Recipient

 

 

Technically how 1,2,3,4,5,6 happen and how they are interconnected to make the payment an atomic action? ILP? Custom software? What exchanges have to support/implement? What FIs have to support/implement? How the XRP transfer happen between 3 and 4 (withdrawal and deposit from exchanges or ILP between XRP tokens)?

Edited by tulo

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1 hour ago, tulo said:

Technically how 1,2,3,4,5,6 happen and how they are interconnected to make the payment an atomic action? ILP? Custom software?

It can be done either way.

 

Quote

What exchanges have to support/implement?

The exchange has to support some API for coordinating the operation, ideally ILP. The exchange has to have some way to easily move money between itself and the FI on its side of the payment. The FI has to trust the exchange to hold its money (or vice versa).

 

Quote

What FIs have to support/implement?

The FI either has to use xRapid or support ILP.

 

Quote

How the XRP transfer happen between 3 and 4 (withdrawal and deposit from exchanges or ILP between XRP tokens)?

It can be done with a payment channel (for small payment), with escrow (for large payments or where there's no trust), or just with a regular XRP payment (where there's a small amount of trust and the payment size isn't enormous).

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@JoelKatz

What is the current status of being able to do this?

Would it make sense to have this building in the background so that when people purchase on-ramp currencies BTC/ETH/LTC that XRP can be used first to prove to banks that there is reduction of cost in addition to quicker transfers?

 

Now that infrastructure is being laid out to bridge physical to the electrical world (Banks -> Blockchain) that we need this sort of highway to be implemented so that when you enter the Blockchain highway, that the highway actually continues instead of leading to a dirt path?

Edited by Elitefoo

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5 hours ago, JoelKatz said:

Fortunately, it's not nearly as hard as you might think. The payment looks like this:

Thank you for this explanation. That's the thing I wanted to understand clearly. 

Off-topic: When do you sleep at all? It is night in America. Looks like you are online 24 hours (explaining everyone how XRP works ;)

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5 hours ago, JoelKatz said:

I think it's been changing and it's different things for different banks. Right now, there is a lot less resistance from FIs than you might think and it's going to come down to us being able to put together a package of products and services that works for them. We're finally at the point where we are starting to do that with XRP.

@JoelKatz

Let's see if I have this correct

 

Banking Industry

Bank = Bank

Bank + Their own coin = introduction to blockchain and ledgers

Bank + Ripple Product Suite = Ability to connect onto the blockchain outside of their jurisdiction

 

Blockchain World

Crypto Exchange =  Crypto Exchange

Crypto Exchange + Ripple Product Suite = No more 150k+ BTC unconfirmed transactions + Quicker access for exchanges to collect trading fees 

 

Banking Industry & Blockchain World

Bank + Ripple Product Suite = Highway to Blockchain (Interstate 95 for example)

Crypto Exchanges + Ripple Product Suite = Access for investment firms (Roads built to the U.S. National Parks for access)

 

 

 

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