The growth of the activities of many businesses, especially small and medium-sized businesses, often hinder the availability of limited working capital. This lack of resources, which affects their competitiveness, often forces them to resort to the creation of tailor-made credit agreements. As these are specific to each destination market, this inevitably results in overhead costs that are far too high for the process to be effective. Faced with this problem, Ripple has just launched “Line of Credit“ a new service simplifying access to financial solutions for businesses. Explanations.
A simple credit arrangement giving access to capital
Line of Credit East ” a beta service on RippleNet who enables clients using liquidity on demand (ODL) to raise capital to initiate cross-border payments using XRP digital asset “. By therefore providing access to capital for each market through a credit arrangement, the solution promotes business growth. The latter thus buys XRP on credit with the advantage of pay one-off commissions on the borrowed amount with no hidden costs. This suddenly results in a credit offer that costs a lot cheaper than most other options available in the traditional market.
The first beneficiaries of the new service RippleNet are nothing other than structures specializing in cross-border money transfers. This enabled them in particular to develop their activities a little more, but above all to provide more affordable services for their customers. The interest of the service is then twofold and allows companies to have a margin to make investments. The direct consequence is access to new markets and therefore new customers. For the time being, Line of Credit is only available to eligible institutional clients of RippleNet depending on their area of jurisdiction.
Breaking down barriers in traditional finance
A bit like DeFi, the Ripple uses technology to provide a lower cost financial solution that only existed with banking institutions. This is also a great opportunity to promote XRP, as the asset provides access to services that were not possible before. A reality which leads elsewhere Asheesh Birla -General Director of RippleNet– stated that ” XRP is the key to what only RippleNet can offer “. Line of Credit also fits perfectly with Ripple’s policy of break down existing barriers in the field of traditional finance.
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More than 300 structures that have already tested the service have given satisfactory feedback, which augurs well for a happy continuation of events. Despite its potential and these testimonials, the price of XRP has not responded with much enthusiasm to the news of the service’s launch.