With the rollout of Ripple’s fast and cheap On-Demand Liquidity (ODL) payment services, enterprises will no longer have to wait for three to five business days to settle costly transactions. 

On Thursday, 18th August 2022, digital payment network Ripple announced that its native token XRP will now be used to facilitate fast and cost-effective cross-border transactions in Brazil. 

The digital payment network aims to achieve this using the RippleNet ODL, launched in partnership with Travelex, a foreign exchange company. Ripple noted that the Ripple and Travelex Bank partnership was the first bank approved by Brazil’s central bank to operate exclusively in foreign exchange.

Travelex will first enable these cross-border payments between Brazil and Mexico and then later open up more payment avenues in the regions and with more payment solutions and use cases suited for enterprises.  

“Brazil is a key market for Ripple given its importance as an anchor to business in Latin America, its openness to crypto and country-wide initiatives that promote fintech innovation. As a result, the market is experiencing an explosion of activity as institutions look to adopt crypto and blockchain technology to solve customer pain points,” Ripple’s CEO Brad Garlinghouse commented on Brazil’s adoption of a crypto-friendly regulatory framework.

He added that over $780 billion in payments flows into Brazil annually, and Travelex’s adoption of an ODL service would only make such cross-border payments efficient. “From day one, we’ve focused on building solutions that deliver real utility, and we are excited to collaborate with an innovative partner like Travelex Bank to help move money more efficiently for the benefit of its customers across Brazil,” Garlinghouse added. 

Latin America’s previous experience with cryptocurrency and digital payment services

Latin america flags

Travelex is not the first Latin American company to use RippleNet services. Other companies like Banco Rendimento, Remessa Online, Frente Corretora and Banco Topazio have also utilized RippleNet services. However, the approval of the Central Bank marks the first time a Latin American bank has used ODL. 

This news came at a time when the Brazilian government approved their first Bitcoin Law in April 2022 to develop a regulatory framework to govern cryptocurrencies in the region.  

Brazil is also creating a Central Bank Digital Currency. Still, the decision to develop one has encountered a bit of controversy, with experts such as Economist Fabio Araujo stating that CBDCs will be an avenue to halt bank runs and impose other restrictions on citizens’ access to money. 

XRP price reaction to the Ripple and Travelex Bank collaboration

Despite the extensive use cases of XRP in Ripple’s ODL service, the altcoin succumbed to the bear market pressure. At the time of writing, XRP was trading at $0.34, a 9.6% decline within 24 hours despite the news. 

price chart  reaction to the Ripple and Travelex Bank collaboration

However, it’s also crucial to remember that for the last two years, there has been a tiff between XRP and the SEC. As such, any developments within the XRP network only strengthen its case and shows its dedication to its users.