Why is Ripple used by banks?

Every digital asset and especially every project underlying them has a story in itself and Ripple has one that is linked to the banks from the beginning. But what makes this project different from others? Why has its technology been implemented in the system of large banking institutions such as Unicredit, Banco Santander, UBS, Crédit Agricole and many others, as well as payment networks such as MasterCard? There are around a hundred large customers, among whom MoneyGram and Western Union have been added among the transfer companies, the RAK bank and the Saudita Central Bank (which follows that of the United Kingdom) with regard to banking institutions.

The success of Ripple technology is indisputable. But what makes its technology so attractive and why is it adopted mainly by two types of subjects, ie banks, and payment networks?

The explanation is one and it is enough to answer both questions: it is a blockchain-type technology designed specifically to ensure instant funds transfers, at almost zero cost, to the whole world.

The question of cross-border transactions.

For banks, it is an optimal product for cross-border transactions, those that in English is called “cross-border transactions”.

But what is a cross-border transaction? This term means a transaction in a foreign currency or a transaction in a domestic currency in which at least one of the counterparties is located outside the country of the domestic currency.

It is precisely cross-border transactions that allow banking institutions that use them to save money that is functional for their business, as well as allowing a worker to send money to his country, paying an infinitesimal amount of XRP.

The XRPs as Fuel.

An interesting aspect of the XRPs used for cross-border payments is that they “dissolve”. This mechanism is absolutely desired since it is intended to avoid the creation of serial bot transactions. And it is for this reason that even though Ripple has created 100 million XRPs, it has only put 38 million on the market. The missing millions are destined to “disappear”, with the sole function of making transactions possible.

The same XRPs are necessary for the Ripple system if a chain of trust for the transfer of assets cannot be found. On their value, however, decides only the market, which still plays a lot for the moment speculation rather than trust.
at speed, important for rate changes.

Transactions through Ripple are very fast. They last 4 seconds and for this reason changes in exchange rates (eg for payments in currencies other than the domestic currency in which they are directed) become a matter of little importance.

The stated goal of Ripple is to make money transfers as fast as sending an email.