By Tobi Loba
Brad Garlinghouse, the CEO Ripple, has recently stressed the reason why the demand for XRP cross-border payments product is currently too much for the payment behemoth to facilitate.
As it is, the Ripple’s payment solution, On-Demand Liquidity (ODL), relies on cryptocurrency exchanges to accept cash and transact the exact amount in XRP across borders, where it can immediately be converted back to the same value in fiat currency.
In as much there is enough liquidity in the marketplace, funds transferred can settle in a matter of seconds. Above all, this speed will aid the funds to bypass market price volatility, the major characteristic of cryptocurrencies in the market.
So as to properly manage the liquidity of XRP, Brad Garlinghouse said the company had to resort to slowing down of the product’s adoption. He said this during a conversation with Modern Consensus.
Garlinghouse noted:
“The company [Ripple] has actually throttled that growth because one of the things that’s important when using ODL is you have to have really good liquidity on both sides of the transaction. And so, if XRP doesn’t have enough liquidity in the marketplace, [then] you can’t put as much demand through.”
Recall that the San Francisco based payment firm recently hired Aditya Turakhia, the former Goldman Sachs FX executive director, in its quest to enhance XRP liquidity and convince more market makers, brokers, exchanges.
The Ripple CEO added that demand for ODL is outperforming the firm’s major international payments platform, RippleNet that doesn’t necessarily need XRP to function.
Meanwhile, Ripple had revealed that over 20% of all transactions on its network of banks and financial institutions across the world are now carried out using the digital token XRP.
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