Ripple CTO David Schwartz shed light on the company’s pre-funding strategy for XRP, a topic at the heart of recent debate.
Responding to a thread of discussion about Ripple’s current account/current account and prefunding, Schwartz explained that clients can prefund in just one account and prefund to any market in ODL’s target area, rather than in each The market pre-orders.
Schwartz also highlighted the flexibility of the Ripple system, saying customers can keep funds in their preferred asset and pay with another.
He highlights the difference between sending USD for USD->MXN payments and depositing MXN for USD->MXN payments.
This flexibility gives clients greater control over their funds and reduces the need for multiple deposit accounts.
Regarding the line of credit option, Schwartz confirmed that Ripple can pre-fund accounts with their own XRP at almost zero cost.
However, the company accepts some credit risk. In this case, the responsibility shifted to Ripple, and the company incurred a fee because they provided funds upfront in XRP.
While Ripple accepts some credit risk, Schwartz acknowledged that there is another risk that customers won’t pay the company to buy XRP, especially if customer funds are held in failed banks that fail or go bankrupt for a number of reasons.
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According to USA Today
