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A report from the Royal Bank of Canada says Ripple and XRP can save banks and financial institutions a significant amount of time and money.

According to the report, blockchain at large can address pain points in the remittance industry by removing middlemen, reducing cost and increasing transparency.

When it comes to Ripple and XRP specifically, the Royal Bank of Canada points to both Ripple’s suite of software products and the XRP ledger as examples of how blockchain can disrupt the industry.

“Ripple created an open source, peer-to-peer, decentralized protocol, with a network of participating financial institutions (RippleNet) and a series of individual technology solutions including payment processing (xCurrent), liquidity support (xRapid) and payment access (xVia).

While not necessary for xCurrent and payment processing, we believe that it is helpful to use the “complete” solution as an example of how blockchain could disrupt the remittance market, including the use of XRP and its corresponding ledger. In this solution, XRP is used as a bridge asset, meaning that it is a store of value that can be transferred between parties without a central counterparty and thus support liquidity between any two currencies. As a result, banks can consolidate their liquidity into one XRP account instead of holding local currency in accounts around the world. By making markets directly between banks’ domestic currencies and XRP, banks minimize the number of intermediaries.”

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The June report also states that Ripple, with or without XRP, can save banks an average of 46% per payment.

The Royal Bank of Canada is the largest bank in Canada by market cap, with more than 16 million clients.

You can check out the full report here.