Take Ripple Coin (XRP) as an example to understand how big the international cross-border remittance of blockchain is.

Ripple's mathematicians have completed a study and came to the conclusion that in the cross-border payment process, the use of Ripple (XRP) is 10 times more secure than fiat money, and the volatility is only It is one tenth of the legal currency.


Breanne Madigan, head of Ripple's global institutional market, refuted the "unfounded criticism" of "increasing volatility in digital assets" on Twitter on Thursday.

Compare XRP volatility with traditional cross-border payments

SWIFT is the current international standard for cross-border payments. It is also a 46-year-old international institution, but it is outdated by technical standards.

International wire transfers via SWIFT take 1 to 14 days to clear. Ripple's research specifically compares the typical wire transfers between the US dollar and the Mexican peso (USDMXN).

Then it uses XRP as an intermediary to compare this:


Compare the volatility of XRP and legal tender in international remittances

The study concluded that the XRP exchange rate is only risky if:

  1. You hold Ripple's cryptocurrency for a few hours between transfers, or
  2. SWIFT greatly reduces the time to clear international wire transfers

Since an average transaction takes 5 to 7 seconds to complete the liquidation, SWIFT is unlikely to achieve process improvement at any time in the century, so these points are not a problem. Ripple CEO Brad Garlinghouse highlighted this issue in an interview in early October.

“If you multiply a low-volatility asset by 270,000 seconds (only 3 days) and compare it to 3 or 4 seconds in a high-volatility asset such as XRP, it turns out that the volatility risk you bear in the XRP transaction It is much smaller than the legal currency."

The volatility curve is basically negligible

The fluctuations in XRP are interesting and can even be said to be unusual, because XRP is largely stable in terms of cryptocurrency prices. However, anyone who has been involved in cryptocurrency in the past two years will also tell you that XRP also has a crazy wave of volatility:


XRP volatility history

This volatility is of course the focus of research. If you are forced to hold XRP for a few hours while trading a transaction, the capital value may change significantly, sometimes up and down by as much as 30%.

For those who only want to exchange dollars for the peso, this is totally unfeasible. However, as the study concluded, the biggest advantage of XRP is its speed:

“Ultimately, the speed of XRP transactions means that trading partners move in and out of digital assets so quickly that they do not need to hedge. The risks of using digital assets are much lower.”

No wonder Garlinghouse insists that XRP beat Bitcoin in the payments arena.