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BREAKING:
Ripple is expanding into working capital lending for RippleNet customers. https://twitter.com/ashgoblue/status/1260336603395788803
Ripple is expanding into working capital lending for RippleNet customers. https://twitter.com/ashgoblue/status/1260336603395788803
The real questions here are: Assuming the loans will be granted in a cross-border basis, how is Ripple planning to allocate the funds in the relevant foreign jurisdictions? And if XRP is the answer, at least in ODL-enabled corridors, what kind of flexibility does this allow for?
If you can source liquidity on-demand to satisfy payment needs as they arise, why couldn't you source working capital on-demand to cover your operative expenses as they become payable? I presume this could reduce both the financial cost of the loan and the borrower's credit risk.
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Which would lead us to a brilliant (actually genius) synergy with ODL. Explanation below:
When you only address remittances, there's a flow assymetry between remmitance sending countries and remittance receiving countries.
Which would lead us to a brilliant (actually genius) synergy with ODL. Explanation below:
When you only address remittances, there's a flow assymetry between remmitance sending countries and remittance receiving countries.
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As a consequence thereof, products such as ODL may cause a market assymetry between any two corridors, i.e. USD and MXN. While ODL increases XRP buying pressure in the U.S., it increases XRP selling pressure in Mexico.
However, the lack of demand for XRP in countries like
As a consequence thereof, products such as ODL may cause a market assymetry between any two corridors, i.e. USD and MXN. While ODL increases XRP buying pressure in the U.S., it increases XRP selling pressure in Mexico.
However, the lack of demand for XRP in countries like
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Mexico, creates a need for arbitrageurs and institutional traders to buy XRP in Mexico, so that the XRP can be sent back to the U.S. (as there's buying pressure in the U.S. and there'll probably be arbitrage opportunities), in order to satisfy more and more remittances.
Mexico, creates a need for arbitrageurs and institutional traders to buy XRP in Mexico, so that the XRP can be sent back to the U.S. (as there's buying pressure in the U.S. and there'll probably be arbitrage opportunities), in order to satisfy more and more remittances.
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So, that's how XRP liquidity is mainly created at remittance receiving countries. You basically rely on opportunists who seek to make a profit on arbitrage opportunities.
The challenge here is: How do I stop relying on these opportunists or, at least, how do I diversify...
So, that's how XRP liquidity is mainly created at remittance receiving countries. You basically rely on opportunists who seek to make a profit on arbitrage opportunities.
The challenge here is: How do I stop relying on these opportunists or, at least, how do I diversify...
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the markets? How do I create a flow of funds from remittance receiving countries into remittance sending countries?
That's right! You lend capital to remittance receiving countries, so they have to make recurrent repayments to the lending country plus an agreed interest.
the markets? How do I create a flow of funds from remittance receiving countries into remittance sending countries?
That's right! You lend capital to remittance receiving countries, so they have to make recurrent repayments to the lending country plus an agreed interest.
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If such loan repayments + interest are made through XRP (or ODL for this matter), you are essentially increasing the demand for XRP in the remittance receiving country, as borrowers are required to buy XRP in order to send the payment to the lender.
If such loan repayments + interest are made through XRP (or ODL for this matter), you are essentially increasing the demand for XRP in the remittance receiving country, as borrowers are required to buy XRP in order to send the payment to the lender.
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Borrowers would be buying XRP from incoming remittances, in order to repay their loans and send the money back to the remittance sending country.
Bingo! That's how you increase XRP liquidity in remittance receiving markets and reduce your reliance on opportunists.
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Borrowers would be buying XRP from incoming remittances, in order to repay their loans and send the money back to the remittance sending country.
Bingo! That's how you increase XRP liquidity in remittance receiving markets and reduce your reliance on opportunists.
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