Ripple and XRP in Real-Time Cross-Border Trade Finance BBLC Practice Questions (Page 1)

Questions 1–5

1. 1application · medium

   A bank's operations team compares the settlement time of a cross-border payment using traditional correspondent banking versus RippleNet. The payment is from a US bank to a bank in the Philippines. Which factor most directly explains why RippleNet can be faster?

   • ARippleNet bypasses all currency conversion, so no time is spent on FX.
   • BRippleNet uses a centralized clearinghouse that processes payments in batches.
   • CRippleNet allows direct connectivity between the two banks, avoiding multiple intermediary hops.
   • DRippleNet operates only during business hours, but those hours are longer.
   Reveal Solution Discussion Select an answer first
2. 2foundation · easy

   How does XRP function as a bridge currency in cross-border transactions?

   • AIt replaces the need for any currency conversion in cross-border payments
   • BIt is held in reserve by central banks to back national currencies
   • CIt is used only as a store of value, not for payments
   • DIt is converted from the sender's currency and then to the receiver's currency, eliminating the need for pre-funded accounts
   Reveal Solution Discussion Select an answer first
4. 3expert · hard

   A trade finance company wants to use RippleNet for supply chain payments across multiple countries. The company's legal team identifies that one country requires all payment data to be stored locally, while another country has no such requirement. How should the company design its RippleNet deployment to comply with both regulations?

   • AAvoid using RippleNet in the country with the data residency requirement.
   • BUse XRP to encrypt data so that it can be stored anywhere.
   • CUse local data storage solutions in the country with the requirement and standard processing elsewhere.
   • DStore all data in the country with the strictest requirement to simplify compliance.
   Reveal Solution Discussion Select an answer first
5. 4foundation · easy

   What is the primary function of Ripple's On-Demand Liquidity (ODL) service?

   • ATo offer a digital wallet for retail consumers
   • BTo use XRP as a bridge currency for real-time cross-border payments
   • CTo create a stablecoin pegged to the US dollar
   • DTo provide loans to small businesses in emerging markets
   Reveal Solution Discussion Select an answer first
6. 5expert · hard

   A US-based bank wants to use ODL for cross-border payments to a country that has recently imposed capital controls restricting the outflow of local currency. The bank's compliance officer is concerned about whether ODL can operate in this corridor. What is the most appropriate assessment of this situation?

   • AODL can operate if the bank uses a third-party liquidity provider that holds XRP outside the country, avoiding the need for local currency conversion.
   • BODL can operate because XRP is not subject to capital controls, and the bank can bypass the local currency restrictions by settling entirely in XRP.
   • CODL cannot operate in this corridor because the local currency cannot be freely converted to XRP due to capital controls, making the bridge currency model unworkable.
   • DODL can operate if the bank obtains a special license from the local regulator to use XRP for cross-border payments.
   Reveal Solution Discussion Select an answer first