Amex, CIBC, UBS & Other Big Banks Testing Ripple Blockchain for Transactions

All News All News Except Press Releases Blockchain Crypto IoT

Nearly eight billion people are connected online in a world where cars self-drive and gadgets and appliances can communicate through the IoT (Internet of Things). Amidst this technology, global payments have remained in the disco era by comparison, until now.

The concept of a Blockchain, first conceptualized by “Satoshi Nakamoto” in 2008 with Bitcoin as the first digital currency, has attracted the interest of Wall Street institutions, minus the Bitcoin. Ripple, which uses a different framework than Bitcoin, can track payments, using a blockchain for faster international payments that remain secure.

Ripple (XRP) adoption surged following news that FX International Payments partnered with Ripple to adopt its Blockchain technology to carry out instant, traceable payments. FX, part of American Express, is among the largest international payment platforms for business. Other large banks testing Ripple include CIBC (Canadian Imperial Bank of Commerce, NYSE:CM), UBS (NYSE:UBS), Banco Santander (NYSE:SAN), and Unicredit (NASDAQOTH:UNCFF). There are over 75 banks that are experimenting with the Ripple technology.

The Blockchain is distributed public ledger that keeps records of transactions and business done in cryptocurrencies like Bitcoin and Ripple. Startup projects like Ripple are utilizing the blockchains in more profound ways than its original intention as a digital currency. The Blockchain applications in Ripple are permissioned and closed, unlike the open-to-all, anonymized Bitcoin.

The Ripple Protocol

Ripple has earned credibility as it is being adopted by banks, and has found its way onto the Bloomberg terminal. The whole concept of XRP is that it enables banks to transfer a variety of assets including currencies like the Euro, Pound, Yen or USD; and even non-currency assets like air miles. This versatility, combined with its speed and cost efficiencies reportedly make Ripple superior to SWIFT, the current technology used for wire transfers.

The current process starts with contacting your bank before you can send the transaction to the SWIFT bank code account. These transactions take at least three days and there are transaction fees paid by the sender and the receiver. Ripple has revolutionized this by offering instant, direct transactions between banking institutions.

Why Banks Are Moving To Ripple

The greatest attraction to Ripple by banks is the real-time international payments and the affordable rates. While bank customers may not care what system the bank is using, they will take note when the transaction time is faster than in the past. For instance, the slow speed and high cost of sending payment in Yen to Japan under the current system make for a bad customer experience. Ripple eliminates this pain-point.

Ripple’s Consensus Ledger can process an average of one thousand transactions per second. Though it requires at least three seconds to finish an international transaction, it is way faster than sending money using the traditional clearinghouse methods like MoneyGram and the Western Union.

Ripple may also become the first choice for banks doing in-country payments. For instance, banks in Japan have turned to XRP due to the snail-paced systems used by their local networks. Japan and South Korea are also experimenting with Ripple for cross-border payments, a source of contention for banks and their customers.

The adoption of XRP is exploding, as it is adopted to connect banks, customers, corporations and payment providers through RippleNet in frictionless global money transfer experience.

Facebook Comments