In a recent post, crypto researcher SMQKE highlighted how XRP can play a critical role in helping banks comply with Basel III liquidity requirements. The researcher explained that XRP allows banks to streamline reserves into a single bridge asset, removing the need for multiple nostro accounts spread across different jurisdictions. This shift has the potential to significantly reduce costs associated with foreign exchange, treasury operations, and liquidity management. SMQKE emphasized that these advantages are supported by documented analysis, pointing to detailed reports that outline the institutional benefits of using XRP in international payments . XRP helps banks meet Basel III liquidity requirements by streamlining reserves into one bridge asset. This reduces reliance on multiple nostro accounts, cuts FX and treasury costs, and simplifies liquidity management. This is all documented below. https://t.co/aMzyS7ejI5 pic.twitter.com/wkUkp1acOY — SMQKE (@SMQKEDQG) August 28, 2025 Cost Efficiency and Liquidity Management The attached documents outline how XRP can reduce the cost of foreign exchange transactions by minimizing the number of balances that banks must hold in different currencies. Under the current system, banks keep large pools of idle cash locked in nostro accounts to facilitate cross-border payments. These accounts, however, are inefficient, as they tie up capital that could otherwise be deployed more productively. By consolidating these reserves into XRP, banks can cut hedging costs and streamline operations. Treasury costs are also affected by this model. The maintenance of multiple accounts across jurisdictions creates additional expenses, particularly in managing counterparty risk and reconciliation. XRP, when used as a bridge asset , reduces the reliance on these accounts, simplifying settlement and lowering operational risk. This creates a leaner system where liquidity can be managed more effectively, ensuring that funds are available where needed without the overhead of excessive cash reserves. Basel III Compliance Basel III places strict requirements on banks regarding their liquidity coverage ratios and high-quality liquid assets. According to the referenced analysis, dormant cash held for cross-border settlement not only represents an inefficient use of capital but also counts against a bank’s balance sheet under Basel III standards. This means banks are compelled to hold even more capital to meet regulatory obligations, adding to costs. XRP addresses this by functioning as a high-liquidity settlement tool. By enabling faster transactions and providing liquidity on demand, XRP reduces the amount of dormant cash that banks must hold. SMQKE underscored that Ripple’s broader vision is to make XRP a reliable liquidity source once its market capitalization and trading volumes are sufficient to support large-scale institutional flows. We are on X, follow us to connect with us :- @TimesTabloid1 — TimesTabloid (@TimesTabloid1) June 15, 2025 Institutional Advantages The documentation also quantifies the cost savings achievable through XRP adoption. Ripple estimates that banks can reduce payment infrastructure costs by up to 33 percent by using XRP to settle international payments . This comes from reductions in liquidity, payment processing, and operational overheads. By removing the inefficiencies of traditional correspondent banking models, XRP enables faster settlement while meeting the compliance needs imposed by Basel III. SMQKE’s commentary underlines the importance of this functionality for banks navigating the increasingly complex regulatory environment. With stricter liquidity requirements, institutions must find ways to optimize their balance sheets without sacrificing efficiency. The research presented suggests that XRP provides a pathway for banks to achieve both goals simultaneously, aligning regulatory compliance with operational cost reduction. Disclaimer : This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are advised to conduct thorough research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses. Follow us on X , Facebook , Telegram , and Google News The post XRP Helps Banks Meet Basel III Liquidity Requirements. Here’s how appeared first on Times Tabloid .
