On 24th August, the Senior Vice President of Product Management at the blockchain company Ripple, Asheesh Birla was interviewed by the popular crypto-influencer Ran Neuner, who is also the host of the CNBC show CryptoTrader. In this discussion, Birla spoke about Ripple’s product xRapid, how the product solves the issue of liquidity and why XRP is preferable over Bitcoin or fiat in the utility of xRapid.

On being asked ‘why do we need the XRP token in xRapid system, instead of USD, fiat or Bitcoin’, Birla responded by stating that the process of using fiat via xRapid is problematic. xRapid is a product built by Ripple to advance cross-border payments and ease the process for its customer base.

Using fiat will be difficult because one has to first wire the currency locally, then convert it into the native currency of the foreign country. This basically takes the system back to the existing ones, failing all the advancements added by xRapid, stated Birla.

Regarding the utility of Bitcoin in the system, he said that Bitcoin has a number of use cases, especially, store of value. The drawback of the Bitcoin network is the slow speed of transactions during high traffic. Subsequently, the transaction fee of Bitcoin is also exorbitant. He further explained:

“…if you’re talking about sending just a couple of $100 and you had to pay Bitcoin fees of $20, I mean that’s sort of really similar to the system that is already built today… The great thing about XRP is that you can move that around the world. It’s counterparty free, decentralized and moves in seconds… And that’s just a great experience…”

In regards to being the market maker and who can do so, Birla stated that anybody can provide liquidity; one just has to place trades on multiple exchanges around the world. Furthermore, he said that whether it is an institution, a bank or an individual, anybody can be a market maker. Ripple’s Vice President also expressed:

“…and that’s like the beauty of like this whole ecosystem is that it’s really democratizing who can provide liquidity and these kinds of services to corporations and people around the world.”

Neuner raised a concern regarding the additional trading fee via xRapid in the process of buying and selling XRP on an exchange. This makes the user pay a double trading fee along with paying multiple spreads.

The remittance expert explained that the customers today are paying a high fee for remittance; 200 – 300 basis points above the market in some cases. With the traditional cross-border payments, several fees such as Swift and wire fees are levied upon the customers. On using the exchanges to do the same, the fee for the same service shrinks by a considerable size. He added:

“Our customers are seeing savings of 40% to 70% over traditional systems. Also keep in mind that the legacy system that’s built today was built for trading billions of dollars or millions of dollars and sending those cross borders. The beauty of this system is that it’s economically feasible to even send 100 dollars now.”

Birla believes that this model and convenience type is highly valuable for payouts in a different fiat currency where micro cross-border payments need to see advancement.

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