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Banks are hesitant to use Ripple’s XRP-powered cross-border payment solution xRapid – or any other cryptocurrency – due to regulatory uncertainty, according to Ripple’s global head of banking.

At the Euro Finance Tech conference in Frankfurt, Marjan Delatinne explained why non-banking financial institutions and payment providers are the early adopters of the new technology.

“Just to make clear, no banking institution is using that, because as you’ve probably heard about, the regulatory framework around the usage of digital assets is not very clear for banks. But payment service providers and some other financial institutions are less governed by these obligations.”

Delatinne also lays out a typical use case for xRapid, using an example of someone sending a payment from the US to Mexico.

“Let’s imagine you are in the US. You have $100 and you want to send that to a user or someone in Mexico. So you go to the crypto exchange, you exchange $100 to XRP. And immediately after the XRP is converted back to Mexican pesos and it is delivered either to the local or to the financial institution that has an account with the crypto exchange.

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So this is actually changing the way that the current liquidity is managed. So you only use the liquidity when you need it. And when you don’t need it, you don’t use it… So this product, I think, is somehow the ultimate way that we see that crypto assets, or digital assets, can help build the global economy by using the costs associated to the liquidity management.”

Ripple launched xRapid for commercial use in October. So far, Ripple has confirmed at least three payment providers are on board, including MercuryFX, Cuallix and Catalyst Corporate Federal Credit Union.

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