The world’s “longest-running crypto exchange” Bitstamp has started supporting EUR-backed IOUs on the $XRP Ledger in a move that brings “secure, cost-effective” transactions in the fiat currency to the ledger.
According to a blog post, Bitstamp published its customers can now take advantage of the $XRP Ledger, which has near instant settlement times and negligible transaction fees, to transfer EUR across the network. The exchange lists as key benefits the “secure, cost-effective, fast and reliable transfers of IOUs,” as well as increased transparency and visibility of transactions.
According to the exchange, all funds are “safely stored on Bitstamp through our custodian partners,” and the new offering gives users access to the decentralized finance (Defi) ecosystem of the $XRP Ledger.
We’re expanding our IOU Services on #XRPL! You can now use EUR-backed IOUs as your gateway to #XRPLedger.— Bitstamp (@Bitstamp) January 30, 2023
Dip your toes into #DeFi with cost-effective & fast transfers, increased transparency and ZERO transfer fees on all IOU transfers.
More here: https://t.co/srFyJxHWkf pic.twitter.com/aZFrWOOXYF
The IOUs, which are an acronym for “I owe you” and represent the existence of a debt, are based on the $XRP Ledger and issued by the trading platform in exchange for eligible assets, in this case, the European fiat currency, when users “wish to acquire or transfer them on the XRP Ledger.”
The Ledger, Bitstamp adds, uses a “distributed consensus ledger using a network of validating servers and crypto tokens called XRP.” The post adds:
Despite having its own native cryptocurrency, it allows the issuance of other asset-backed tokens on the XRP Ledger called IOUs. Bitstamp is an entry/exit point for the XRP Ledger and issues three asset-backed IOUs.
Bitstamp also pointed out that it never stores the tokens itself, as “all of that happens on the XRP Ledger.” To deposit eligible access on the exchange, users must first ensure that their external XRP wallet address trusts a specific address first.
The exchange’s IOUs are supported but the Xumm wallet, which is a large non-custodial wallet on the XRP Ledger.