The Velocity of Money

Clogged pipes impede water flow in a plumbing system, reducing its efficiency. Similarly, in the world of economics, money acts as a fluid, benefiting the various entities when it moves freely and efficiently.

Nevertheless, pre-funded bank accounts impede the flow of money, serving as barriers within the economic ecosystem.

Traditionally, businesses have relied on setting up accounts with correspondent banks to operate. This friction was unavoidable, resulting in trillions of dollars being trapped due to the lack of a mechanism for instant value transfer.

But now, the blockchain technology offers a revolutionary solution. Digital assets on the blockchain enable instant value transfer, marking the advent of the "Internet of Value."

Ripple has discussed how the legacy banking system has trapped capital worldwide, underscoring the need for a shift towards blockchain payments.

The velocity of money is crucial to economic growth and business efficiency. As blockchain payments become more prevalent, international businesses, especially small and midsize operations, will benefit from improved fluidity.

With the removal of pre-funded accounts, businesses can strategically allocate financial resources, make investments, hire employees, and purchase supplies.

While the migration to blockchain payments occurs, businesses that embrace the efficiency of this system will have a competitive advantage. The ability to send and receive money instantaneously positions these first movers ahead of the market.

Progressive businesses across industries are recognizing this opportunity and embracing blockchain payments, leaving behind the antiquated legacy banking system..