Ripple and XRP in Real-Time Cross-Border Trade Finance BBLC Practice Questions (Page 4)

Questions 16–20

1. 16foundation · easy

   What is the primary architectural role of RippleNet in cross-border payments?

   • AA standalone ledger that replaces all existing banking systems
   • BA decentralized cryptocurrency exchange for retail traders
   • CA network of financial institutions using a common protocol for real-time messaging and settlement
   • DA blockchain-based supply chain tracking system for physical goods
   Reveal Solution Discussion Select an answer first
2. 17application · medium

   A global remittance company processes payments between two currencies that have thin foreign exchange markets and no direct liquid pair. They want to reduce the number of pre-funded accounts they maintain. How can XRP serve as a bridge currency in this scenario?

   • AUse XRP as a messaging standard to replace the need for currency conversion entirely.
   • BConvert the source currency to XRP and then XRP to the destination currency, using XRP as an intermediate asset to provide liquidity.
   • CHold XRP in every destination country to act as a local currency substitute.
   • DUse XRP to settle the payment in the source currency only, avoiding the need to convert at the destination.
   Reveal Solution Discussion Select an answer first
4. 18expert · hard

   A trade finance platform wants to offer real-time invoice financing to suppliers in emerging markets. The platform's current process takes 3 days to settle funds. The platform wants to reduce this to minutes but must also manage the risk of fraud and ensure compliance with local regulations. Which solution best meets these requirements?

   • AUse XRP to directly pay suppliers without any KYC checks to speed up the process.
   • BIntegrate RippleNet for the disbursement and implement robust KYC/AML checks on the platform.
   • CUse a private blockchain with a custom token to avoid regulatory oversight.
   • DUse RippleNet to automate the credit decision and eliminate manual review.
   Reveal Solution Discussion Select an answer first
5. 19application · medium

   A bank in the European Union wants to use Ripple's ODL service for cross-border payments involving XRP. The bank's compliance team is concerned about regulatory treatment of XRP. Which action should the bank take to address this concern?

   • AAvoid using XRP entirely because it is illegal in the EU.
   • BUse XRP only for domestic payments to avoid cross-border regulatory issues.
   • CAssume XRP is a commodity in all jurisdictions because it is used as a bridge currency.
   • DConduct a legal assessment of how XRP is classified in each jurisdiction involved in the payment corridor.
   Reveal Solution Discussion Select an answer first
6. 20application · medium

   A mid-sized bank in Brazil wants to offer real-time cross-border payments to its corporate clients without maintaining pre-funded nostro accounts in every destination currency. The bank already uses ISO 20022 messaging and wants to keep its existing core banking systems. Which approach should the bank adopt to meet this requirement?

   • AUse SWIFT gpi with the 'Cover' payment method to reduce the need for nostro accounts.
   • BJoin RippleNet and use the On-Demand Liquidity (ODL) service with XRP for settlement in corridors where liquidity is needed.
   • CDeploy a private blockchain with its own token to settle cross-border payments without external liquidity providers.
   • DEstablish bilateral nostro accounts with one partner bank in each destination country to avoid using any digital asset.
   Reveal Solution Discussion Select an answer first