Suppose bank A wants to send 100 USD to bank B using ripple. As per other answers, time taken for this transaction ranges between 4-7 seconds. But, what if the price of ripple drops drastically during this time frame.


The market makers (which can be the banks themselves) price this slight risk into the rates they offer. Most of the time, this doesn't happen, and they make a slight profit. When it occasionally does happen, they may take a slight loss. Fortunately, the price can't move very much in so little time -- and, if necessary, the amount of time can be brought down to sub-second levels by using off-chain scaling schemes such as payment channels.

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