Blockchain-based payment networks Ripple (XRP) and Stellar (XLM) are expanding the use of distributed ledger technology (DLT) in cross-border payments.
Cross-border payments are known to be a financial sector fraught with costs and processing times due to their structure involving multiple intermediary banks. Consequently, the global financial sector has continuously sought technological improvements to enhance payment efficiency.
Ripple provides inter-financial institution settlement and liquidity solutions based on the XRP Ledger (XRPL). It aims to streamline remittance processes by reducing the burden of using pre-deposit accounts (nostro accounts).
Stella is a relatively lightweight blockchain network used for peer-to-peer remittances and transactions between small financial institutions. Its structure features simplified intermediary steps.
The cross-border payments market is considered a significant segment of the global financial system. The industry is focusing on whether blockchain-based infrastructure can improve the efficiency of existing payment structures.
