In a recent interview, Rahul Advani, APAC Policy Director at Ripple, talked about RippleNet’s On-Demand Liquidity (ODL) service, which is powered by digital asset XRP.

Advani’s comments were made during an interview with financial news platform Bread.

When asked how Ripple plans to “adapt to the growing demand for crypto-based cross-border settlements”, he replied:

A big problem that RippleNet solves is in today’s banking system. There are considerable liquidity issues and a lot of capital is tied up in pre-funding. Ripple solves that problem by using a solution called On-Demand Liquidity (ODL)

Our customers can leverage the digital asset XRP as a neutral bridge asset between two currencies, which eliminates the need for pre-funding in destination accounts and substantially reduces their capital overheads and operational costs.

As for his “thoughts on the development of CBDCs in the APAC countries”, this is what Advani had to say:

I think it’s fairly clear that the APAC is leading by example across both retail and wholesale CBDCs. 

Looking ahead, however, central banks will have to tackle the challenge of interoperability when it comes to cross-border payments. If each country is creating its own digital currency, then we’re just recreating the same siloed system that we have in place today, which means that countries are not going to be able to use each other’s CBDCs. 

Therefore, interoperability to facilitate cross-border transactions is key here. And this is where neutral bridge assets like XRP, which is an open source, public and decentralised digital asset, can continue to play a role. So what we’re seeing for XRP in ODL – which acts as a neutral bridge between currencies – we see the same use case for CBDCs where ODL can be used as a neutral bridge between CBDCs.

Disclaimer

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

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