Cryptocurrency analyst Kyren, known as NoBScrypto on Twitter (now X), conducted an analysis on the potential impact of cryptocurrencies like Ripple’s XRP and XLM on international bank transfers.
Kyren, drawing from four years of experience in banking, highlighted various issues associated with traditional finance, including the slow pace and high costs of processing international transfers.
As a solution, Kyren proposed that cryptocurrencies like XRP and XLM could address these challenges by enabling fast and cost-effective global transfers, all without the need for payment service providers (PSPs) or nostro accounts. Nostro accounts are held by one bank in another country to facilitate transactions in its native currency, simplifying exchanges.
How Ripple’s XRP Could Transform Banking Transactions:
Kyren explained that banks can utilize XRP as a bridge currency, eliminating the necessity to lock funds in nostro accounts to ensure liquidity. Moreover, he emphasized that XRP and XLM can complete international transactions in seconds, charging only nominal fees compared to the time and high fees charged by banks.
Regarding XLM, Kyren noted that, much like XRP, it allows the global transfer of money between friends and family without intermediaries imposing excessive fees that affect users’ savings.
Kyren also highlighted another project that, while less known and lacking the massive market capitalization of XRP (exceeding $27 billion), offers a payment solution that is agnostic and features an experienced team with backgrounds at companies like Visa, SWIFT, PayPal, among others.
The Transformative Potential of Distributed Ledger Technology (DLT):
The cryptocurrency analyst concluded by underlining that Distributed Ledger Technology (DLT) could have streamlined his manual work of updating payment ledger systems. Kyren emphasized the advantage of blockchain technology in automating and enhancing the reliability of this process.
Consequently, Kyren envisions that the financial system will increasingly adopt cryptocurrencies like XRP and XLM to enhance productivity, security, and speed, particularly within a banking sector that risks falling behind if it fails to modernize its technology.
As of the time of writing this article, XRP is priced at $0.49 with a market capitalization of $26.2 billion, according to data from CoinMarketCap. Meanwhile, XLM is trading at $0.1055 with a market capitalization of $2.9 billion.