Why Banks Might Hold XRP for Decades
For decades, international payments have been routed through the SWIFT network, which is a messaging system that connects thousands of banks. SWIFT transactions can take days, sometimes weeks, because of intermediary banks, currency conversions, and messaging delays. The main users, banks, need to carry liquidity buffers to cover the risk of those issues. This means that using SWIFT, which stands for Society for Worldwide Interbank Financial Telecommunication, comes with a capital burden for banks.
XRP (CRYPTO: XRP) is a cryptocurrency designed for nothing flashier than moving value from A to B almost instantly and for almost nothing in fees. Banks wrestling with faster-payments mandates and cross-border fee pressure now have a tool that settles transactions in the time it takes to blink, so long as they're willing to abandon SWIFT. Here's why some of those banks and other financial companies are starting to consider XRP as a core reserve they might keep for decades rather than merely as a cryptocurrency investment to hold on the balance sheet.
On the XRP ledger (known as XRPL), a transfer finalizes in roughly three to five seconds, with typical network fees of less than 0.001 XRP, or about a tenth of a cent at recent prices. For the sake of comparison, consider that SWIFT's own progress report touts a "dramatic" improvement to a 24-hour average for cross-border settlement last year, down from 96 hours in 2019.
Source Fool.com
