This was first hinted by a Twitter user identified as Ganesh Hiremath. Payments Canada is an Ottawa-based organization that takes care of clearing and settlement infrastructure, processes and rules essential to those transactions.
Interesting – XRP mentioned as "STABLECOIN" one of the solutions for X-Border Payments… pic.twitter.com/EY14tBOWgZ
— Ganesh Hiremath (@ganeshhiremath) December 29, 2019
Payments Canada Says Ripple Enables Faster and More Efficient Cross-Border Transfer
On 26th November 2019, Payments Canada released a publication under the Payment Perspectives on its official website titled “How cross-border payments are evolving”.
There it stressed expressly about Ripple’s digital token XRP in the sub-topic that says “stablecoins for cross-border payment.” It described stablecoin as a category of cryptocurrency with a relatively stable price.
According to the Payments Canada account, stablecoins make the instantaneous processing and security of payments possible such as many other digital currencies.
Afterward, it categorized the Ripple’s native token XRP and Stellar network’s native token, the Stellar Lumen (XLM) as digital currencies that function like the stablecoins.
It stressed its reason by claiming that Ripple and Stellar enable faster and more efficient cross-border payments relative to corresponding banking.
It furthered that the fact that Ripple centers its focus on fostering the cross-border settlement between banks around the world makes its services different from Stellar that basically provides cheaper cross-border payment services to its users, especially the unbanked.
Payments Canada Stresses Ripple’s Functionalities
Payments Canada shared that Ripple works with many financial corporations across the world to settle cross-border payments by transacting the digital token XRP via Ripple Network. This then brings about on-demand liquidity.
It mentioned the servers that manage the ledger, clients, and intermediaries as the three components of the Ripple ecosystem.
Payments Canada shared that “Unlike Bitcoin or Ethereum, Ripple does not run proof of work nor does it run a proof of stake consensus mechanism. Instead, Ripple transactions rely on a Byzantine Generals Problem (BGP)26 consensus protocol, known as Ripple gateways, to validate account balances and transactions of the system.”
It furthered that any accepted type of currency or asset is liable for transaction on Ripple Network. This opens any cross-border payment service provider leveraging Ripple Network to transactions using XRP, which needs a small percentage of XRP to be destroyed in the course of the transaction.