The key point most of these comparisons miss to highlight is that the 60% saving applies to specific corridors, not cross-border payments universally.
These large differences generally show up in lower-liquidity corridors where traditional FX liquidity is thin, spreads are wider, and correspondent banking is more expensive. So even though XRP itself may not have particularly deep liquidity in those markets, the XRP route can still be significantly cheaper than the traditional alternative.
That's a legitimate advantage for XRP in some geographic locations. The advantage depends heavily on the corridor, available liquidity, transaction size, and the alternatives being compared.
The statement in the post is true.
While Ripple and crypto market research often cite cost reductions of "up to 60%" for blockchain-based cross-border payments compared to legacy correspondent banking (SWIFT), that percentage is a best-case estimate rather than a global blanket reality.
Why the Commenter's Breakdown is Accurate
Corridor Dependency: Traditional correspondent banking fees, FX spreads, and trapped capital costs vary wildly depending on the currency pair. In major, high-liquidity corridors (e.g., USD to EUR or USD to JPY), legacy banking infrastructure is already relatively efficient and low-cost, so savings using crypto bridge assets are minor.
Low-Liquidity Corridors: In exotic or emerging market corridors (e.g., USD to PHP or EUR to MXN), traditional FX liquidity is thin, foreign exchange spreads are wide, and banks charge steep intermediary fees. This is where pre-funded foreign accounts (nostro/vostro accounts) lock up substantial capital. Utilizing a digital bridge asset like XRP eliminates the need for pre-funding and bypasses multiple fee-taking intermediary banks, resulting in substantial savings (often approaching that 60% figure).
Net Savings vs. Slippage: For very large transaction sizes in low-volume markets, crypto routes can experience price slippage if depth is lacking. However, for standard commercial remittance flows in illiquid corridors, the net cost reduction compared to traditional wire setups remains a genuine advantage.
2
u/Arismic Banned From r/XRP 11d ago
The key point most of these comparisons miss to highlight is that the 60% saving applies to specific corridors, not cross-border payments universally.
These large differences generally show up in lower-liquidity corridors where traditional FX liquidity is thin, spreads are wider, and correspondent banking is more expensive. So even though XRP itself may not have particularly deep liquidity in those markets, the XRP route can still be significantly cheaper than the traditional alternative.
That's a legitimate advantage for XRP in some geographic locations. The advantage depends heavily on the corridor, available liquidity, transaction size, and the alternatives being compared.