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25 September 2022
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Ripple will launch loan product, possibly to solve asymmetry ODL

Ripple, the fintech company behind the cryptocurrency XRP (XRP), is reportedly planning to launch a loan product. This is evident from a new vacancy on the Ripple website.
In the vacancy of Ripple you can read:

RippleNet traditionally serves its customers with an offer for cross-border payments, but Ripple is expanding into loans. This person [in de nieuwe positie] launches a new loan product from concept to launch for RippleNet customers.

It will be a so-called working capital loan product. Such loans are used by companies to finance their activities in the short term. By using blockchain technology, these loans will probably be able to be taken out faster. In addition, it will provide more transparency.
Arturo Portilla, a Mexican tax attorney and former XRP Center manager, believes the new loan product is one of the goals of solving the asymmetry between the countries between which On-Demand Liquidity (ODL) is used for wire transfers. He states:

As a result, products such as ODL can cause market asymmetry between two corridors, namely USD and MXN. While ODL increases the buying pressure of XRP in the United States, it increases the selling pressure of XRP in Mexico.

As a consequence thereof, products such as ODL may cause a market assymetry between any two corridors, i.e. USD and MXN. While ODL increases XRP buying pressure in the U.S., it increases XRP selling pressure in Mexico.
However, the lack of demand for XRP in countries like
– Arturo Portilla (@Arturo_P_A) May 12, 2020

He continues:

If such loan + interest repayments are made through XRP (or ODL for this matter), you’re essentially increasing the demand for XRP in the country to which remittances are made, as borrowers have to buy XRP to send the payment to the lender.

If such loan repayments + interest are made through XRP (or ODL for this matter), you are essentially increasing the demand for XRP in the remittance receiving country, as borrowers are required to buy XRP in order to send the payment to the lender.
– Arturo Portilla (@Arturo_P_A) May 12, 2020

Ripple recently made new changes to its network. A majority of the network has approved the function of removing wallets. The question is whether this is a good or bad development.

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