Ripple (XRP) is a popular choice among banks worldwide. The network’s fast transaction speeds, low gas fees, and energy-efficient consensus make it an ideal cryptocurrency for traditional financial institutions.
Fortunately, this is exactly the clientele that Ripple Labs has in mind. While other blockchains like Bitcoin (BTC) and Ethereum (ETH) are focused on serving the masses, Ripple is specifically designed for the world’s largest financial players.
Which banks have already adopted Ripple, and why is the blockchain protocol so popular among financial institutions?
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What Is Ripple (XRP)?
Designed as one of the earliest alternatives to Bitcoin, Ripple (XRP) is one of the OGs of the crypto market. The open-source platform aimed to provide the same blockchain-based payment system without suffering from Bitcoin’s sluggish confirmation times, high transaction fees, and devastating environmental impact.
Originally created by Jed McCaleb and David Schwartz, the Ripple payments protocol has captivated the crypto space for years. The cryptocurrency has gone from strength to strength, establishing itself as one of the most popular blockchain networks in the world and attracting interest and strategic partnerships from banks and financial institutions worldwide.
Why is Ripple so Popular with Banks and Financial Institutions?
Primarily, Ripple is a cross-border payments processor that makes it easier than ever to transfer funds internationally. Instead of waiting days and paying extortionate fees, Ripple facilitates rapid international transactions in seconds, with fees costing users less than a penny.
This kind of flexibility and efficiency is a game-changer for banks and large-scale financial institutions. Banks and traditional financial players lose millions of dollars on international transaction fees every year, and the lengthy processing times dramatically restrict the flow of funds.
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What are the key features that make Ripple’s technology so popular?
1. Rapid Confirmation
Bitcoin may have been the original blockchain that opened the door to fast payments. These days, however, Bitcoin’s 10-minute average block time has been outstripped by more advanced protocols like Ripple.
Ripple’s flagship product, the XRP Ledger, promises to complete transactions in 3-5 seconds. This makes it significantly more effective than existing cross-border payment systems, helping to improve the flow of money worldwide.
2. Low Fees
Another one of Ripple’s incredible benefits is its low transaction fees. Legacy blockchains, like Bitcoin and Ethereum, are often criticized for having impractical gas fees. During periods of network congestion, a simple Ethereum transfer could set you back anywhere between $25-$50 USD.
Ripple, on the other hand, seems to have cracked the code. The network maintains consistently low transaction fees of around $0.0002, regardless of the level of activity on the network.
3. Energy-Efficiency
One of the crypto industry’s biggest criticisms is that Proof-of-Work blockchains like Bitcoin consume catastrophic energy. The average energy consumption of the Bitcoin network is comparable to that of countries like Poland or Kazakhstan.
This is another instance where Ripple shines. The network is inherently sustainable, estimated to use roughly 61,000x less energy than its biggest rival, Bitcoin.
4. Scalability
It should come as no surprise that banks and financial institutions require secure and scalable systems; how else would they support millions of users daily?
Fortunately, the XRP network has them covered, offering a blockchain that is affordable, energy-efficient, and robust enough to handle the demands of a growing world. Ripple Labs claims that the XRP Ledger can handle up to 3,400 transactions per second, which is dramatically more scalable than competitors like Bitcoin and Ethereum.
What Is the RippleNet?
Thanks to its impressive performance metrics and market dominance, Ripple has been able to secure strategic partnerships with banks all over the world. This international network of financial institutions is called the RippleNet.
RippleNet members use Ripple’s distributed technology to execute the real-time settlement of international transactions. This helps banks, payment providers, and digital exchanges frictionlessly transfer funds and facilitate a more liquid flow of money globally.
Which Banks Are Using Ripple?
Ripple’s network of banking partners has continued to grow as the blockchain expands its global reach and influence. Moreover, the number of potential partners is expected to increase as Ripple Labs tries to move forward from its lengthy legal battle with the U.S. Securities and Exchange Commission (SEC).
The following banks are confirmed to have been working with Ripple:
- Santander (USA)
- Canadian Imperial Bank of Commerce (Canada)
- Kotak Mahindra Bank (India)
- Itaú Unibanco (Brazil)
- IndusInd (India)
- InstaReM (Singapore)
- BeeTech (Brazil)
- Zip Remit (Canada)
- LianLian (China)
- RAKBANK (U.A.E.)
- IFX (U.K.)
- TransferGo (U.K.)
- Currencies Direct (U.K.)
- Airwallex (Australia)
- SEB (Sweden)
- SBI Remit (Japan)
- Siam Commercial Bank (Thailand)
- Krungsri (Thailand)
On the Flipside
- Ripple may be a faster and more affordable blockchain network than Bitcoin and Ethereum, but it is outclassed by modern networks like Solana (SOL) regarding speed and efficiency.
Why This Matters
Suppose Ripple can secure more strategic partnerships with banks and financial institutions. In that case, it will help bring credibility and adoption to Ripple Labs and XRP and the entire crypto market.
FAQs
Several banks, including Santander and the Commonwealth Bank of Australia, have confirmed strategic partnerships with Ripple Labs.
Ripple’s underlying technology is good for banks because it’s faster and more affordable than traditional cross-border payment protocols.
You can purchase XRP from leading crypto exchanges like Binance and Coinbase.
