Cryptocurrency analyst Kyren, better known on Twitter (now X) as NoBScrypto conducted an analysis of the potential impact of cryptocurrencies like Ripple’s XRP and XLM on international bank transfers.
Kyren pointed out that during his four years working in banking, he observed numerous issues related to traditional finance, such as the slow pace and high costs associated with processing international transfers.
As a result, the crypto pundit explained that cryptocurrencies like XRP and XLM could resolve these problems by enabling fast and cost-effective global transfers without needing payment service providers (PSPs) or nostro accounts. One bank holds Nostro accounts in another country to process transactions in its native currency, simplifying exchanges.
How Could Ripple’s XRP Revolutionize Bank Transactions?
Kyren explained that XRP can be used by banks as a bridge currency, eliminating the need to lock funds in nostro accounts to ensure liquidity. Additionally, he highlighted that unlike the time and high fees banks charge for international transactions, XRP and XLM can complete them in seconds, charging only nominal fees.
Regarding XLM, Kyren noted that, like XRP, it facilitates the transfer of money between friends and family globally without any intermediaries charging excessive fees that impact users’ savings.
Kyren also emphasized another project which, while not as well-known and not approaching the massive market capitalization of XRP (over $27 billion), offers a payment solution agnostic with an experienced team that has worked for companies like Visa, SWIFT, PayPal, among others.
Distributed Ledger Technology (DLT) and Its Transformative Potential
The cryptocurrency analyst concluded his analysis by pointing out that DLT could have simplified his manual work of updating payment ledger systems. Kyren highlighted that one of the advantages of blockchain is that it automates and makes this process reliable.
Therefore, Kyren expects that in the future, the financial system will adopt cryptocurrencies like XRP or XLM to improve productivity, security, and speed in a banking system that could lag if it doesn’t update its technology.
At the time of writing this article, the price of XRP remains at $0.49, with a market capitalization of $26.2 billion, according to CoinMarketCap data. Meanwhile, XLM is trading at $0.1055, with a market capitalization of $2.9 billion.