Ripple's XRP Matches FedNow's Liquidity Management Requirements
Ripple's On-Demand Liquidity (ODL) system uses XRP to provide 24/7 liquidity management, which matches what the Federal Reserve requires of private sector instant payment services. This was discovered by crypto researcher SMQKE through documentation from Ripple and the Federal Reserve.
SMQKE compared the two systems, focusing on their respective approaches to liquidity management for continuous cross-border settlement. The researcher found that both ODL and FedNow use XRP as a bridge currency to facilitate real-time movement of funds.
The Federal Reserve's documentation highlights the Liquidity Management Capabilities (LMT) that support 24/7 instant payments. These capabilities enable fund transfers between master accounts, joint accounts, and service providers, with correspondent institutions responsible for settling liquidity management transfers initiated by participating FedNow institutions.