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In contrast with the runaway success of stablecoins, Bank of America (BoA) remains committed to incorporating Ripple's XRP-fueled solutions for cross-border payments, which reflects institutional faith in the digital currency's singular value proposition.
This is in line with recent commentary from the Director of the Digital Asset Group (DAG), who contends that the liquidity and regulatory certainty available in XRP make it an indispensable vehicle for institutional settlement—despite the prominence of stablecoins for retail transactions.
BoA's Ripple Partnership
Bank of America's connection with Ripple dates back to 2020, when it collaborated with RippleNet—a cross-border payments network leveraging XRP for on-demand liquidity (ODL).
Unlike SWIFT transfers, which can take days and are expensive, BoA settles cross-border payments in seconds with ODL using XRP as a bridge currency.
It has proven very useful for BoA's corporate clients operating in sectors like manufacturing and logistics, where supply-chain payments require real-time settlement and openness.
“XRP’s speed and cost efficiency are unmatched for high-value cross-border flows. Stablecoins excel in consumer payments, but institutions need the liquidity and compliance framework XRP provides.”
— DAG Director
Stablecoins versus XRP
The DAG Director's report highlights a fundamental split in crypto adoption:
- Stablecoins (USDT, USDC) dominate retail payments and DeFi due to price stability.
- XRP dominates institutional settlement, where its 3-second finality and $0.0002 average fee outcompete stablecoins on high-volume corridors.
XRP's regulatory edge is no less material. While stablecoins are coming under greater scrutiny (e.g., MiCA's 100% reserve requirements), XRP's non-security status in key jurisdictions like the U.K. and Japan gives banks like BoA operational certainty.
BoA's XRP Integration
Bank of America's application of Ripple's ODL addresses two high-impact use cases:
- Just-in-Time Manufacturing: Suppliers of automotive components use ODL to pay foreign manufacturers of parts, syncing payments with assembly-line timing.
- Treasury Optimization: Corporates convert idle fiat to XRP for 24/7 liquidity, reducing foreign-exchange reserves by up to 60%.
- Such uses deliver actual savings: A BoA client moving $50M monthly via ODL saves ~$120,000 in fees and saves $1.2M in float cost annually.
DAG Director's Verdict
The DAG Director highlights that the strength of XRP lies in its niche utility, not head-on competition with stablecoins:
- Liquidity Bridges: XRP's $2.5B of daily volume enables instant large transfers without slippage.
- Regulatory Clarity: Ripple's partial legal win against the SEC provides banks with compliance confidence.
- Energy Efficiency: XRP's consensus mechanism uses 99% less energy than proof-of-work blockchains.
This three-way synergy makes XRP a must-have for institutions—even as stablecoins gain traction in consumer markets.
While Ripple grows ODL corridors to 40+ countries and central banks considering XRP for CBDC interconnectivity, BoA's risk appears prescient. The DAG Director further contributes that behemoths like BBVA and Santander are growing adoption of ODL, and Ripple's new stablecoin (RLUSD) will supplement,—not replace—XRP's settling role.
A Coexistence, Not a Competition
Bank of America's continued deployment of XRP and the DAG Director's breakdown indicate a significant point: As the crypto universe continues to develop, XRP and stablecoins serve different purposes.
For institutions that need velocity, compliance, and scalability, XRP is still the underpinning of global value transfer—illustrating the degree to which its use extends beyond speculation in markets.
