Ripple the enterprise payments blockchain company, announced that three customers are using xRapid in production. They are MercuryFX, Cuallix, and Catalyst Corporate Federal Credit Union.
Ripple has a few products. The main one that numerous banks are using is xCurrent which is a quicker way to make transfers. xCurrent is essentially a bi-directional messaging protocol.
However, in most cases with xCurrent, one or both parties will have nostro accounts – a bank account with the receiving bank – which ties up a lot of money.
In contrast, xRapid does not require Nostro accounts. Instead, the XRP digital asset is used to ‘source liquidity’ to make the transfers between banks.
What is a Nostro account and why does it matter?
The current mainstream banking system uses the correspondent banking concept. If bank A wants to transfer money to bank B, then bank A will usually have a foreign currency account with bank B to do this, referred to as a Nostro account.
If bank A does not have an account at bank B, it will use some other bank as a go-between or correspondent. Given the large number of banks in the world, that’s a ton of accounts to tie up money and to reconcile. So if instead, you have a single pool of a digital asset that can be translated into any currency, that makes the process simpler, cheaper and frees up liquidity for banks.
In xRapid’s case that digital asset is XRP. Compared to Bitcoin and some other digital assets, the transaction fees are far lower.
“MercuryFX has been working closely with Ripple for more than a year to bring the power of RippleNet to our customers,” said Alastair Constance, CEO and founder of MercuryFX. “In pilot tests we saw the benefits of xRapid, and we’re excited to roll commercial payments out within the quarter. The time to replace slow, expensive payments architecture is now because the need for global access to smooth-flowing capital has never been so acute.”
Ripple performance update
The company says its customer base grew 100% in the year to Q3 2018 and it is signing up on average two customers per week. Ripple now has almost 300 employees.
Currently, the payments company has clients in more than forty countries on six continents. As previously announced, US-based PNC Bank joined RippleNet. Also SBI Ripple Asia now has a license and will launch shortly. In this case transfers will include domestic Japanese payments.
Ripple also recently settled its billion dollar dispute with R3.