Ripple Announces Successful xRapid Transfer from US to Mexico

In this instance, the US bank first sent USD to a gateway where it was converted into XRP. Next, the XRP was sent to a gateway in Mexico where it was then exchanged for Pesos.

Ripple relies on third-party exchanges to convert XRP to fiat currency.

Rather than depending upon today's slow banking infrastructure, xRapid selects the exchange best prepared to facilitate the trade.

The chosen exchange swaps XRP for the fiat currency of choice and voila, the international transfer is complete.

"Financial institutions using xRapid saw a savings of 40-70 percent compared to what they normally pay foreign exchange brokers. An average xRapid payment took just over two minutes, compared to today's average of two to three days when sending cross-border payments."

If a US bank wants to send currency to a Mexican bank, the Mexican bank must have USD, and the US bank has to have Pesos.

The US bank must first send funds to another bank before being ultimately routed to Mexico.

Ripple describes itself as a global exchange for anything of value and XRP acts as a universal medium of exchange for cross-border payments.

XRP can be transferred in a matter of seconds, but the Ripple Protocol is still heavily reliant on third-party intermediaries to facilitate the exchange of XRP for fiat currency.

"The portion of the transfer that relies on the XRP Ledger takes two to three seconds, with the additional processing time attributed to movement across the intermediary digital asset exchanges and local payment rails."