How Do Crypto Exchanges Convert Fiat to XRP? Questions on Technical and Operational Processes

[briannezhad]

Hi everyone,

I’m unsure if this is the right place to ask, so I apologize if this is off-topic. If not, I’d appreciate it if someone could guide me to the correct forum or resources to find answers to these questions.

I’m trying to understand how crypto exchanges (like Coinbase, Binance, etc.) technically convert fiat currencies (USD, EUR, etc.) into cryptocurrencies like XRP.

Here’s what I know so far:

• Exchanging funds from a user’s bank account and depositing them into the exchange’s master bank account is straightforward. This creates a fiat balance for the user on the platform.

But from there, I’m unclear on how the fiat is converted into XRP. Specifically:

1. What does the exchange have that a regular individual doesn’t, allocating a block or transaction on the XRP ledger?
2. Does Ripple allocate a portion of the XRP supply specifically to exchanges?
3. How do exchanges manage this for other cryptocurrencies?
4. Are there legal or operational requirements (beyond technical knowledge) to open my exchange? For instance, do I need a partnership with Ripple to access XRP?
5. Yes, people control the ledger (P2P), but how does the ledger network prevent anyone from allocating a portion of it without Fiat through the API or Client?

Ultimately, I’m trying to understand how XRP is distributed to exchanges and individual users.

Thank you in advance for any guidance or insights!