Cross River Bank announced on October 15 that it is adding Ripple USD (RLUSD), the stablecoin issued by Ripple, to its Core Operating System, the platform the bank uses to move money for its fintech customers. The integration includes support for the XRP Ledger, a public blockchain network where transactions are designed to settle in roughly three to seconds.

A stablecoin is a digital token built to hold a steady value, and RLUSD is designed to track the US dollar. By wiring the token into its core banking infrastructure, Cross River is placing blockchain settlement next to the payment services it already provides, rather than launching it as a standalone product. Because the Core Operating System is the same platform that already moves money for the bank's fintech customers, the integration puts RLUSD alongside the payment flows those businesses run today.

How the RLUSD Integration Works

Cross River is a US bank that supplies financial infrastructure to other businesses. Many of its clients are fintech companies that rely on the bank to handle payments on their behalf.

According to the bank, the goal of the integration is to give fintech customers access to blockchain settlement alongside conventional payment rails. Businesses connected through Cross River could use stablecoin rails next to the systems they already know, including ACH transfers, wire transfers and other bank payment services. The single-integration approach is the practical point here: a fintech connected to Cross River could reach blockchain settlement without building and maintaining a separate connection to a blockchain network on its own.

For Cross River, adding stablecoin support is part of a wider effort to give customers access to different payment methods through a single integration. For Ripple, the deal gives RLUSD another route into regulated banking and places the stablecoin inside the daily workflows of a US bank.

Speed and Cost on the XRP Ledger

Transactions on the XRP Ledger are designed to settle in about three to five seconds, and each one can cost a fraction of a cent. These characteristics are among the reasons Ripple is pitching RLUSD for use cases such as cross-border payments, merchant settlement and treasury transfers.

Many of these payment flows do not fit neatly within normal banking hours. A blockchain network, by contrast, can process transactions at any time of day.

Blockchain speed, however, is not the same as the total time it takes for money to reach its destination. Several steps can add time before funds arrive with the receiving person or business. Compliance reviews are one such step, while currency conversion and the off-ramp process of moving funds back into a bank account can also slow delivery.

A Settlement Tool, Not a Replacement

Neither Cross River nor Ripple described the deal as a replacement for existing payment networks, and neither company said current systems would be phased out. For now, the integration amounts to a bank adding another settlement tool for its customers.

Fintech companies will decide for themselves whether to use it. Actual use of RLUSD on the platform will depend on which fintechs find it useful enough to build into their operations.

Source: Blockonomi