Settlement and liquidity
The design uses one dollar claim on one XRP Ledger network. The issuing account and currency code identify a trust-line token. A matching symbol alone cannot identify the claim.
Illustrative transfer
- Bank A funds the issuer with USD 1 million and receives 1 million tokens.
- Bank A sends Bank B 250,000 tokens. Their holdings are 750,000 and 250,000 respectively. Issued supply and backing remain at 1 million.
- Bank B can pay another approved participant using its balance. If it instead redeems the full 250,000 and receives fiat, 750,000 tokens and USD 750,000 of backing remain.
The example assumes final funding, eligible banks, par redemption and no fees. After tokens are extinguished, an unpaid fiat payout remains a liability of the issuer.
Four separately funded obligations
- Issuer reserves
- Eligible assets backing outstanding tokens and supporting the issuer’s redemption obligations.
- Settlement inventory
- Funded tokens held by each participant for approved network payments.
- Fiat and FX capacity
- Separate capacity from contracted providers, with defined currencies, cutoffs and payout terms.
- Credit
- Additional funding under a separate lender agreement, with underwriting and limits.
All capacities are proposed. The same funds cannot be counted both as issuer reserves and as operating cash or lending capital.