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The persistent challenges associated with guaranteeing cross-border payments has been highlighted by Ripple Labs’ Senior Executive Officer, Middle East & Africa, Reece Merrick. In a response to the frustration of a veteran banker, Merrick noted that the traditional banking system of settlement remains "painful."
GTreasury's unique edge over traditional banking
According to him, the slow settlement processes he witnessed firsthand from his earlier banking days, before moving to Ripple, expose the frustration of his clients. He decried the multiple layers of intermediary banks that a client’s payment request has to pass through and the associated delays.
Merrick implied that traditional banking systems are slow, opaque, unpredictable and stressful when it comes to cross-border settlements. He believes it was not good service for a client not to know specifically when their money would arrive at its destination.
The senior executive claimed that GTreasury, which has been acquired by Ripple for $1 billion, is revolutionizing cross-border payments. He explained that Ripple is utilizing the XRP Ledger to ensure secure, efficient and reliable transactions.
The goal is to overcome the challenges of trapped liquidity, slow settlement and high payment costs to clients. Merrick highlighted that with GTreasury, clients are assured of round-the-clock settlements. Additionally, the cost of cross-border settlements is significantly reduced by between 60% and 90%.
Another huge change offered by GTreasury is the flexibility and speed it offers to clients. Unlike the traditional banking system, which requires two to three days, GTreasury offers blockchain-based payments in seconds.
The acquisition of GTreasury by Ripple is part of its expansion efforts aimed at enhancing cross-order payment systems.
Recently, Merrick hinted at a possible expansionary move into South Africa, given improvements in the regulatory environment. Notably, South Africa remains a key market for Ripple as it seeks to establish a presence for the Ripple USD (RLUSD) stablecoin.
Ripple’s strategic capture of cross-border settlement
Interestingly, given the dominance of giants like Tether (USDT) and Circle (USDC) on the stablecoin market, Merrick says RLUSD aims to move beyond being a "Ripple-only" asset.
It is aiming to become a regulated banking tool for the blockchain. Ripple is focused on taking products to existing users rather than waiting for them to migrate.
With these plans set in motion, Ripple intends to become a global force in cross-border settlement through quicker and reliable solutions.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team