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XRP Volatility vs Traditional Cross-Border Payments

XRP Volatility vs Traditional Cross-Border Payments

Comparing XRP Volatility With Traditional Cross-Border Payments

SWIFT is the current international standard for cross-border payments. It’s also a 46-year-old institution and is archaic by technological standards.

International wire transfers that route through SWIFT take anywhere between 1-14 days to clear. Ripple’s study, in particular, compares a typical wire transfer between U.S. dollars and Mexican pesos (USDMXN).

It then compares this using XRP as an intermediary:

XRP Volatility Table
Comparing the volatility XRP to fiat in cross-border payments | Source:

The study concludes that XRP is only risky for exchange rates if:

  • You hold Ripple’s cryptocurrency for a few hours between transfers, or
  • SWIFT drastically reduces the time it takes to clear international wires

Since an average transaction takes between 5-7 seconds to clear and SWIFT is unlikely to improve their process any time this century, neither of those points are an issue. Ripple CEO Brad Garlinghouse highlighted this very question in an interview he gave earlier in October.

“If you multiply 270,000 seconds [just over 3 days] in a low-volatility asset and you compare that to 3 or 4 seconds in a highly volatile asset like XRP, it turns out you are taking less volatility risk with an XRP transaction than you are with fiat.”

The Volatility Profile Is Basically Negligible

XRP’s volatility profile is an interesting one. It’s unusual because in cryptocurrency price terms it is for the most part quite stable. However, anyone who has dabbled in crypto over the past two years will also tell you that it has periods of crazy volatility:

XRPUSD chart
XRP’s volatility profile | Source: TradingView

And this, of course, is the point of the study. If you were forced to hold XRP for a few hours while making an exchange, the value of your capital could change significantly. Sometimes as much as 30%.



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