Ripple’s On-Demand Liquidity service, which facilitates international remittances and settlements, can work without leveraging XRP as a bridge currency. This is according to the CTO of the San Francisco-based blockchain payments firm.
The ODL is currently being used by high-profile money transfer firms like MoneyGram, and Ripple is working on developing new ODL payment corridors this year.
David Schwartz: ODL Can Work With A Piece Cut Out Instead Of XRP Infrastructure
Ripple’s ultimate goal is to replace the legacy cross-border payments infrastructure with the On-Demand Liquidity (ODL) solution which uses the cost and speed advantages of the XRP cryptocurrency.
The company also aims to eliminate the burden of having to hold liquid cash on hand in order for international remittances to work. Concerning this matter, a Twitter user quizzed Schwartz whether it is possible for the ODL to work without buying or selling XRP, for instance, in a case where the customer has a large XRP reserve.
Schwartz responded that the ODL can operate with a piece cut out. This means that one part would be cut out if the person initiating the transaction already has XRP or if the recipient is willing to accept XRP.
The Ripple exec then notes that the company prefers fiat-to-fiat transfers due to several reasons he did not mention. Furthermore, the ODL can work with no XRP infrastructure at all, which would see it being deployed the fastest. Per Schwartz, they can then use XRP “where it could provide the most impact with a ready supply of customers and payments to tap into.”
Schwartz argues that direct payments with XRP require the most infrastructure and would present a major roadblock for institutions as the sender institution would be required to hold XRP while the recipient must be willing to accept the digital token.
We chose to do fiat-to-fiat first for a few reasons, but the biggest one is that it can work with no XRP infrastructure at all, so could be deployed fastest. Then we could use XRP where it could provide the most impact with a ready supply of customers and payments to tap into.
— David Schwartz (@JoelKatz) June 13, 2020
Ripple Set To Open More XRP Payment Corridors This Year
Ripple’s blockchain payments platform, ODL, has gained traction in recent months. The XRP-powered service has particularly thrived in the remittance corridor between the United States and Mexico.
Asheesh Birla, the SVP of product and corporate development at Ripple recently noted that Ripple is planning to open new ODL corridors this year:
“Ripple is on track to open new ODL corridors this year and we’re onboarding new customers and working with existing customers to ramp up ODL volume in important corridors including USD-MXN, USD-PHP, AUD-USD and PHP, and from EUR-USD.”
Notably, Ripple seems to be targeting Brazil for its next XRP corridor. Ripple’s top executives held a private virtual meeting last week with the president of Brazil Central Bank, Roberto Campos Neto. Additionally, Ripple’s global head of banking, Marjan Delatinne, postulated that the firm is actively working on a new payment corridor in Brazil.
