The widespread adoption of cryptocurrencies is reshaping the traditional financial world, making us believe that the future is digital. Currently, the global economy is facing many challenges, such as inflationary issues, and it lacks aspects like transparency, scalability, security, and speed, which are all covered by the power of blockchain technology. In terms of financial innovation, Ripple stands apart for its great structure that enables users to transfer and receive money from all over the world, with high-security levels, in a few seconds or minutes. The XRP ecosystem promotes financial inclusion, thanks to the global accessibility of the network, and it brings incredible benefits and opportunities that could reshape the traditional structure of banking in the real world. The revolutionary concept promises great success, suggesting that digital payments are the future and attracting a broad audience into the virtual realm. So, to make sense of the potential of the network, in this article, we are going to unveil the main benefits of Ripple for global finance:

What is XRP?

Ripple is the digital payment network that hosts the native token XRP. The coin stands apart from other cryptocurrencies thanks to its great business model that promotes a future-oriented mindset for financial institutions. It relies on a consensus mechanism, where participants can agree and validate the transactions. Ripple supports global transactions, providing speed, scalability, efficiency, security, and low fees, addressing the main issues of traditional financial institutions. The XRP ledger was mainly designed to address the cross-border transaction systems, allowing instantaneous payments, and it serves as an alternative to the traditional SWIFT, which usually involves higher fees and several days to process the transactions. Ripple, the company behind XRP, created Ripple Net, which is used by banks and other financial institutions of the real world to move money faster, pushing the network to widespread adoption that votes on its reliability and success, redesigning the global economy. So, if you are ready to begin your trading journey, you can buy Ripple on a trustworthy platform to benefit fully from the potential of the coin and create a balanced portfolio that could bring you high returns and a new income.

Speed and low fees

Traditional financial institutions usually take several days to validate a transaction, especially for cross-border payments. Also, the fees are very high, which is why most users avoid sending money internationally so they don’t have to break the bank. XRP addresses these issues, providing users with speed, efficiency, and low fees. The transactions are usually settled in 3-5 seconds, and the networks support over 1500 PTS, while SWIFT of traditional banking validates international transactions from 1 to 5 days. XRP also has a low-cost structure because users don’t have to pay additional fees for intermediaries, considering the decentralized nature of the ledger. To take advantage of these benefits, the coin can also serve as a bridge currency, with no need to have a pre-funded account for handling international transactions.

Global accessibility

XRP enhances global accessibility, aiming to reach a broad audience and provide parties involved in transactions with fast and low-cost services. Traditional banking is accessible just to individuals who have a bank account, but blockchain technology welcomes everyone, with no need for credit cards or other financial instruments, promoting inclusion. This aspect builds the perfect landscape for businesses in developing regions and the lack of a good economy, also minimizing illegal payments that often happen in the real world due to the under-baking issue in many countries. Thanks to the accessible structure of XRP< the network has seen a growth in institutional partnership. In fact, XRP has built connections with banks and other institutions from the traditional financial landscape worldwide, including regions like Southern Asia, Latin America, and the Middle East.

Regulatory framework

Ripple is becoming a top choice for institutions and individuals all over the world. Understandably, the inclusion of important banks and sectors in the digital market gives a confidence boost to the audience and encourages multiple countries to hop on the tech trend, adopting the coin as a great alternative for banking. Of course, the popularity of the technology grabs the attention of legal authorities, who investigated the reliability of the assets. For instance, in 2020, the SEC filed a lawsuit against XRP, considering it an unregistered security, but lately, in 2023, XRP was approved for the major platforms among investors. In 2024, the coin and its advanced network are building a stronger regulatory framework, and we can expect considerable changes that will give extra trust points to Ripple Labs next year.

On-demand liquidity

As we’ve mentioned above, the XRP network was designed to improve cross-border payments. The network provides many services that benefit this concept. For instance, on-demand liquidity (ODL) provides liquidity between currencies, reducing the need for institutions to hold large amounts of foreign money in their accounts and hence, making the processes more efficient and less complex.

Scalability

Thanks to the unique consensus mechanism, XRP can handle many more transactions per second than other cryptocurrencies and avoid the usual congestion during high transaction volumes. This function addresses the scalability problems of the mining-based blockchains, as validators can process the transactions more efficiently, at scale.

How to manage the volatility risks of XRP

The most popular strategy for risk management in the crypto world is diversification, which consists of investing in multiple assets trying to balance the losses with the gains. In fact, cryptocurrencies have different price movements, so, suppose you may lose small amounts from the downgrade of a coin, you can win from the growth of XRP and so on. Don’t forget, that the golden rule for investors is to invest what you can afford to lose.

Finally, we can say that the future of XRP looks promising, so 2024 is surely the best time to begin your trading journey embracing the popular currency.