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Ripple is a peer-to-peer payment protocol established for financial enterprise use, such as banks and payment providers. Originally named Opencoin, Ripple enables cross-border transactions at low-costs by removing intermediaries that are currently present in modern transaction methods, such as the outdated SWIFT system.
Its official digital currency, the Ripple token (XRP), is the coin that will be used to make transactions between the parties.
Ripple focuses on addressing a few major problems. The Federal Reserve, Institute of International Finance, and World Trade Organization estimated that the traditional infrastructure costs $1.6 trillion. It is also incredibly slow, with payments taking between three and five days to settle. To make matters worse, there are high failure rates for the transactions. Ripple comes in response to the demands for an experience that is seamless, cost-effective, and reliable.
Ripple has three solutions for banks:
xCurrent: Software which provides instant settlement of cross-border payments
xRapid: Low-cost liquidity through enabling on-demand XRP
xVia: Standard interface used by entities to send payments worldwide.
Ripple has built up partner exchanges to for liquidity. Every bank can use xrp through moneygram without having to purchase it first.
Here is a good infographic for the interoperability between money networks and platform with the Ripple protocol