Ripple and XRP in Real-Time Cross-Border Trade Finance BBLC Practice Questions (Page 10)

Questions 46–48

1. 46application · medium

   A bank in Mexico wants to send payments to a bank in South Korea. The bank does not have a direct relationship with the Korean bank, and the traditional correspondent route requires two intermediary banks. The bank is considering using XRP as a bridge currency. What is the primary advantage of using XRP in this scenario?

   • AXRP provides a 24/7 settlement window, whereas SWIFT only operates during business hours in the correspondent banks' time zones.
   • BXRP is accepted by all banks in South Korea as a legal tender, so the Korean bank can use it directly to pay its customers.
   • CXRP eliminates the need for FX conversion because both banks can settle in XRP, avoiding the spread on the MXN/KRW exchange rate.
   • DXRP allows the bank to settle the payment directly with the Korean bank without needing a pre-existing correspondent relationship or pre-funded account.
   Reveal Solution Discussion Select an answer first
2. 47expert · hard

   A bank wants to use ODL for cross-border payments but is concerned about the legal status of XRP in a key corridor. The local regulator has stated that XRP is a 'virtual asset' but has not yet issued specific guidance on its use in payments. The bank's legal team is divided: some say the lack of guidance means ODL is prohibited, while others say it is permitted. What is the most appropriate course of action?

   • AStop all ODL activity in the corridor because the lack of regulatory guidance is equivalent to a prohibition.
   • BUse ODL only for transactions below a certain threshold to minimize regulatory exposure, assuming smaller transactions are exempt from scrutiny.
   • CProceed with ODL but implement a robust compliance framework that includes enhanced monitoring and regular legal reviews, treating the lack of guidance as a risk to be managed.
   • DProceed with ODL without any additional compliance measures because the regulator has classified XRP as a 'virtual asset', which implies approval.
   Reveal Solution Discussion Select an answer first
3. 48foundation · easy

   Which component is central to RippleNet's ability to enable real-time cross-border payments?

   • AA centralized clearinghouse owned by Ripple
   • BA network of pre-funded nostro accounts at each bank
   • CA public blockchain that anyone can mine
   • DA standardized protocol for interbank messaging and settlement
   Reveal Solution Discussion Select an answer first