Comparison Between Ripple and Stellar: Cross-Border Payments

• At first glance, Ripple (XRP) vs. Stellar (XLM) always looks more like a titanic clash of cross-border payment networks. 
• Also, it should be noted that the COVID-19 pandemic is also the one that has affected every sector, which includes B2B cross-border payments. 

Similarly, in this content piece, people will get a direct and clear comparison between Ripple and Stellar. Research also outlines the potential of blockchain networks in the cross-border market industry and how instant payments can be beneficial.

People should also note that instant payment schemes are built on ISO 20022, which later unlocks additional messaging capabilities.

Meaning Of Ripple (XRP)

Understanding the overall meaning and concept is crucial. Ripple is powered by XRP, its native digital currency.

Cross-border transactions usually come with long delays, lack of transparency, high fees, and more.

Ripple, however, uses a distributed ledger that bypasses the standard proof-of-work consensus mechanism. Instead, the Ripple Labs team developed its own method, the Ripple Protocol Consensus Algorithm (RPCA), to ensure swift and secure transaction validations.

Meaning Of Stellar (XLM)

Similarly, Stellar (XLM) was developed by Jed McCaleb and launched in 2014 as a blockchain platform to support cross-border payments.

Unlike Ripple, which mainly focuses on financial institutions like banks, Stellar aims to help countries where the remittance sector contributes significantly to GDP growth.

Comparison Between Ripple and Stellar

Even though both were founded by the same person, Ripple and Stellar have taken different paths in the crypto market over the years.

• Ripple’s primary focus has been on serving established financial institutions, making cross-border transactions more efficient and seamless.

• On the other hand, Stellar focuses on financial inclusion, helping the unbanked population globally by providing alternative solutions for remittances.

Another key difference is decentralization—Stellar is perceived as more decentralized compared to Ripple.

Ripple’s degree of centralization has been questioned, mainly because the company controls a significant portion of XRP’s supply through the XRP Escrow protocol.

Both projects have also followed different partnership strategies:

• Ripple has partnered with major banks and financial institutions.

• Stellar has opted for collaborations with NGOs and organizations that support financial accessibility.

Conclusion

To sum up, Ripple (XRP) and Stellar (XLM) serve similar functions, but they have different goals and target audiences.

In terms of performance, both are highly scalable and cost-effective, making them well-equipped to onboard thousands of new users.