By Solomon Odunayo
SBI Holdings, the Japan-based financial giant is on the verge to test the use cases embedded in the digital token XRP in the $6.6 trillion foreign exchange (FX) market.
As reported by the financial outlet Nikkei, the trial will leverage the utility embedded in XRP to execute cross-border currency swaps.
Testing the Speed of XRP as a Bridge Asset
According to the report, the test is meant to know whether the speed of XRP can make it serve as a bridge asset to reduce the risk of price fluctuations that occur when currencies are traded for one another, and also reduce the transaction fees.
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The report added that the test will be carried out through the collaborative effort of SBI Holdings and the cryptocurrency startup FXcoin Ltd.
Foreign Exchange Markets Reached $6.6 Trillion per Day In 2019
Going by the data released by the Bank for International Settlements, trading in the foreign exchange markets attained $6.6 trillion per day in April 2019. And the swap volumes of foreign exchange are reportedly estimated to account for relatively 50% of the FX market.
So, this would serve as a big boost for XRP liquidity if could it could pass the rare test.
Partnership between Ripple and SBI Holdings Has Been Productive
The partnership between Ripple, the US-based payment firm and the Japanese financial giant SBI Holdings has clearly been productive over the years.
This collaboration has birthed SBI Ripple Asia, an initiative that serves as a means to bring payments powered by distributed ledger technology (DLT) to financial institutions and the providers of remittance transfer in Asia.
SBI e-Sports, a subsidiary of the financial giant, also launched Apex Legend, which gives players the ability to receive their salaries in XRP. And a number of its players have already chosen the cryptocurrency as a means of receiving their salaries.