#XRPETF Modern monetary systems are based on the obligations among participants. Coins and banknotes are obligations issued by the government, while loans are personal obligations of the borrower and bank accounts are obligations of the bank, grounded in what is permitted by laws and government obligations. An obligation has value if the owner trusts they will be able to receive its value. Thus, we can see the banking network as a trust-based network.

The main method for making a payment to another participant in the system is by electronically transferring the ownership of bank obligations through the banking network, from the payer to the payee.

The banking network is a hierarchical network in which banks are mere intermediaries between their clients, and in turn, central banks serve as intermediaries between banks. This structure implies that it is very simple to establish a payment route between any participant, but it is filled with points of failure, which could also be considered as single points of control.

The XRP system generates income primarily through its system, allowing banks to conduct transactions among themselves without the need for central banks.