XRP Credit Lines Sees Ripple Enter The Lending Space Author: Ali Raza Last Updated: 10 October 2020 Ripple stands as a multibillion-dollar valued payments startup, and has a very complicated relationship with the XRP cryptocurrency, even if the firm owns it. Alongside the fact that it’s gearing towards an IPO, Ripple has pushed into the lending business, as well. Pushing Into A new Space The Silicon Valley-based fintech firm had unveiled its Line of Credit service on Friday. This service will be available for customers that leverage the On-Demand Liquidity (ODL) service, as stipulated by the blog post itself. A spokesperson highlighted that this is the first time Ripple is testing a new product within the lending space. Depending on its outcome, the spokesperson stated that Ripple might opt to build a more robust offering sometime later on. Advocated As Low-Cost Lending As Ripple explained it, this new credit line feature will allow various small-to-medium enterprises to expand their respective businesses during times that they would have experienced a stalled growth. This stalling in development could lead to these enterprises failing to compete against the larger companies, in turn. The companies that already make use of ODL on RippleNet, which is a network of payment providers, will now be capable of buying XRP from Ripple on credit. These companies will subsequently be charged a fee on the borrowed amount, as well. The service itself was developed in order to help facilitate lower-cost financing within the cross-border payments space, when one compares it to more traditional channels. The company explained that it had already been trialed by RippleNet customers by way of a pilot program. Pushing For Easier Cross-Border Payments ODL leverages XRP as a sort of “bridge currency” in order to allow cross-border payments to be facilitated. An example of this would be if a Canada-based business needs to pay an Israel-based supplier, but no foreign exchange dealer is willing to convert the two forms of fiat. Instead, both parties can agree to convert the money both in and out of XRP, which is a quick process. Using this same example, should the Canadian firm not have the ability to front the money, the credit line allows it to pay regardless. Alongside this, the exchange rate at the time of payment is locked in, and the firm is capable of paying the Ripple back whenever it’s convenient. This example comes from the company itself. As it stands now, Ripple holds approximately 6.2 billion in XRP, which is worth around $1.55 billion at current trading prices. The company’s supply accounts for only 6% of the total XRP supply, as 45 billion XRP is in circulation, and 48.9 billion XRP stands in escrow. Ripple itself is known to periodically sell XRP into the market, as well.