Despite not having a physical presence in the United States, Ripple CTO David Schwartz has shed light on Bitso’s potential to handle billions of dollars in XRP remittances between Mexico and the United States.
Schwartz emphasized in a recent discussion with the XRP community that Bitso acts as an intermediary by converting the received XRP to Mexican Pesos (MXN) and facilitating domestic payments to recipients in Mexico.
Why would Bitso need to operate in the US for this? Bitso just converts received XRP to MXN and makes a domestic Mexican payment to the recipient.
— David "JoelKatz" Schwartz (@JoelKatz) June 23, 2023
Read Also: MoneyGram CEO Discusses Using XRP for Cross-Border Payments
Schwartz said that the user in the United States needs to send XRP to Bitso, which then does the appropriate conversions and sends MXN to the receiver.
In the course of the conversation, Schwartz noted that Bitso’s success in enabling cross-border transfers between the United States and Mexico, particularly with Ripple’s product, is due to its ability to convert XRP to MXN and handle last-mile delivery.
Schwartz went on to say that, even inside Ripple’s On-Demand Liquidity (ODL) structure, Bitso is solely responsible for currency conversion and delivery, with no participation in the originating currency.
When asked about opening a Bitso account in the United States to transmit XRP, Schwartz explained that Bitso accounts are not required for persons in the United States. Rather, recipients in Mexico can open Bitso accounts, and anyone with XRP can send payments to them from anywhere in the world. According to Schwartz, “XRP transfers value to Bitso in this transmission.”
So in this example Tiffany could have an account in the US, send XRP and they get MXN on the other side? Can someone in the US make an account with Bitso to send XRP?
— Jungle Inc (@jungleincxrp) June 24, 2023
Finally, Ripple CTO offered an excellent description of how the Mexican-based exchange, Bitso, permits billions of XRP remittances between Mexico and the United States despite having no physical presence in the United States.
Schwartz added that Bitso’s effectiveness in facilitating cross-border remittances between the countries stems from its capacity to convert XRP to Mexican Pesos (MXN) and handle final fund distribution. His statement gave light on the mechanics of Bitso’s operations, emphasizing that, even inside Ripple’s On-Demand Liquidity (ODL) architecture, Bitso is solely responsible for the conversion and delivery of the destination currency, with no participation in the source currency or country.
Read Also: John Deaton: Thousands of Investors Bought XRP With Zero Knowledge about Ripple
The Future of Cross-Border Payments
The capacity to process billions of dollars in XRP remittances without having a physical presence in the United States is a huge advancement in the cross-border payments industry. This technology has the potential to transform how money is exchanged across countries.
Traditional cross-border payments are sometimes delayed, costly, and opaque. This is because they rely on the slow and inefficient traditional banking system. The use of cryptocurrencies such as XRP can aid in the acceleration and reduction of the cost of cross-border payments.
The Ripple network is especially well-suited for international payments. The network is built to be quick, efficient, and secure. It can also handle a high volume of transactions. As a result, it is an excellent platform for conducting XRP remittances.
We may expect much more innovation in the cross-border payments area as the use of cryptocurrency grows. Using XRP and other cryptocurrencies could make cross-border payments faster, cheaper, and more efficient. This would be extremely beneficial to firms and individuals who rely on cross-border payments.
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