Jump to content

Recommended Posts

8 minutes ago, Khaleesi said:

 

Question posed by Ripple reddit user;

I just can't fathom why banks don't just adopt the infrastructure Ripple has created and just disuse XRP entirely?

Answer: (Joel Katz)" Because the infrastructure that Ripple is building provides fast payments but not fast settlement. Right now, it doesn't matter that much that it takes a few days to settle a payment because the payment itself takes about that long. But if the payment can complete in seconds and the settlement still takes days, customers will still have to pre-fund their payments to avoid the slow path. That means it will cost their customers a lot more. One of the key factors driving banks to Ripple right now is that banks want to save their customers money, particularly for new corporates that spend a lot of money pre-funding payments.

Take Uber for example. Uber wants a person to drive for them because they need extra money to buy groceries. For that to work, Uber has to be able to pay people in many countries within an hour. While Uber is more extreme, companies like AirBNB, Amazon and even more traditional companies like Seagate need to make rapid payments all over the world.

Today, a company would do that by keeping a pile of money in every market they might need to pay into. But that costs them a fortune. If their payments could settle quickly, they would save those outlays and every bank wants their business.

Fortunately, international payments are almost as bad today as international settlement is. So Ripple can make a business out of providing better and aster payments even if banks still have to use traditional correspondents for the settlement. So banks do see huge value in Ripple even without XRP.

But every bank that uses Ripple's payment system also eliminates all the technical obstacles to settling with XRP. So for a payment where XRP is faster, cheaper, or both, there's absolutely no reason for them not to use it."

 

thats awesome

hopefully the wont just use "house xrp" for these transactions

Share this post


Link to post
Share on other sites
Guest

Is this statement by David Katz... is it referring to settlement in 'nation state' fiat money systems?

i would have thought that the Uber driver could convert to Bitcoin and buy groceries. Maybe I am missing something.

Edited by Guest

Share this post


Link to post
Share on other sites
7 minutes ago, Max Entropy said:

Is this statement by David Katz... is it referring to settlement in 'nation state' fiat money systems?

i would have thought that the Uber driver could convert to Bitcoin and buy groceries. Maybe I am missing something.

sjoelkatz referring to settlement with xrp as opposed to current correspondent banking method

Share this post


Link to post
Share on other sites
2 minutes ago, tulo said:

It's not true that Ripple solution (via ILP) without XRP cannot settle. ILP itself (for which XRP is not mandatory) can provide "settlement". 

Yes, he mentions that...it's just not fast!

Share this post


Link to post
Share on other sites

He is referring to the use-case for XRP, which is that it allows banks to settle instantly. GPI, SWIFT, bank coins, etc -none of them can settle instantly. Messaging does no good when it takes three days to settle. This is why a crypto-asset is needed. A publicly traded one is more beneficial because it opens far greater liquidity. 

Share this post


Link to post
Share on other sites
1 hour ago, tulo said:

It's not true that Ripple solution (via ILP) without XRP cannot settle. ILP itself (for which XRP is not mandatory) can provide "settlement". 

it can settle without a crypto-asset, just much much slower.

Share this post


Link to post
Share on other sites
Just now, Montoya said:

it can settle without a crypto-asset, just much much slower.

Why? If a payment goes via centralized private ledgers it can take milliseconds compared to seconds...

Share this post


Link to post
Share on other sites

Even if centralized ledger exists, how do they settle? Banks don't accept IOUs as settlement. They want an asset not a debt instrument. Debt instruments open them to risk. My guess is that you are imagining some sort of ledger debt swap. But this is not realistic. The only situation where such a scheme works is if the nations have identical capital inflows and outflows. in reality inflows and outflows are immensely uneven.

Share this post


Link to post
Share on other sites
Just now, Montoya said:

Even if centralized ledger exists, how do they settle? Banks don't accept IOUs as settlement. They want an asset not a debt instrument. Debt instruments open them to risk. My guess is that you are imagining some sort of ledger debt swap. But this is not realistic. The only situation where such a scheme works is if the nations have identical capital inflows and outflows. in reality inflows and outflows are immensely uneven.

It's exacly why ILP is there...each private ledger only has to deal with it's own ledger...so genius! No nostro-vostro accounts because the liquidity (and the accounts) are in the hand of the market makers...

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...