- Euro Exim Bank has started embedding complex trades within blockchain messages
- B2B payments and SMEs growing at a faster pace
- Digital Currencies remove one of the biggest obstacles to SMEs business growth
What makes digital asset unique is that “they’re universal currencies, meaning anyone can use them as units of value anywhere in the world,” says Marcus Treacher, SVP Customer Success at Ripple in his “Blockchain in cross-border payments: SMEs’ opportunity in international trade,” post.
As such he says digital assets like XRP by acting as a bridge currency and enabling real-time currency exchange can improve liquidity by removing the need to hold cash in accounts with foreign banks.
On-Demand Liquidity for International Transactions
Talking about Ripple partner Euro Exim Bank, Treacher explains how the UK SME bank, that specializes in international import and export payments, uses blockchain and XRP to provide clients with on-demand liquidity for international transactions.
This means the bank can move money as per their clients’ demands without needing multiple pre-funded currency accounts all over the world.
“In addition to this, Euro Exim Bank has started embedding complex trades within blockchain messages, allowing it to automate international trades and even further reduce the speed and costs of payments for international exports and imports,”
Digital Currencies Remove one of the Biggest Obstacles to SMEs Business Growth
B2B payments are growing faster than C2C and B2C markets at 5 to 10% per year. And SME cross-border payments represent a significant portion of the global B2B payments market, amounting to more than $10 to $15 trillion annually.
Given the fact that SMEs also account for 60% of employment and 40% of national income in emerging markets, it is a great opportunity for financial institutions and local economies to operate in these markets.
“Blockchain and digital currencies are a great alternative to traditional cross-border payments as they offer a significantly faster, cheaper and more transparent way to move money around the world,”
When poor liquidity is one of the biggest obstacles to business growth for SMEs, this is the way to empower SMEs, he said, so that they can take advantage of the growth opportunities that the global commerce market offers.
B2B Payments and SMEs Growing at a Faster Pace
Treacher further illustrated how another Ripple partner Cambridge Global Payments — a leading global provider of commercial payment solutions and Fleetcor Technologies’ subsidiary — uses XRP to facilitate cross-border payments.
By leveraging the cryptocurrency, the company was able to cut down the costs for international B2B payments and lower the attraction speed to just a few seconds.
This, however, is just a starting as according to a recent report, B2B cross-border transactions will increase by 7% by 2023, all thanks to the rise of blockchain-based payment networks.