Author – Marequitta
Roughly a month ago (February 21), it has been revealed by the Ripple team that Brazil and Latin America’s biggest bank by market cap, Itaú Unibanco, have signed an agreement with Ripple to use its blockchain network’s xCurrent to process remittances and cross-border payments. Ripple is like a combination of an online worldwide payment processing system (i.e. PayPal, Skrill, Payoneer, etc.) and a cryptocurrency, which makes it the best option for Itaú Unibanco to pick for their global transactions.
Why Banks are Choosing Ripple
Financial experts are at odds about cryptocurrencies; however, it seems that they will become a part of our global financial infrastructure whether they accept it or not. A lot of people find it very useful and there’s no reason to not use it. Did you know that most of the major banks in Japan and South Korea which is lead by SBI Holdings (one of Japan’s prominent banks) have been using xRapid – Ripple network’s liquidity platform – in order to reduce operating costs in payments processing between financial institutions and banks across South East Asia and the world?
In the next few months, Itaú Unibanco, as well as major banking institutions like Indian commercial bank IndusInd and Singapore-based remittance service provider InstaReM will utilize Ripple xCurrent to settle payments between financial service providers all over the world.
Aside from Asian and Latin American banks, Canadian and Brazilian remittance service providers in large remittance markets have also started using xVia, which is another payment solution developed by Ripple the Ripple team have reported. The payment solution xVia is specifically developed to be used in the Ripple blockchain to process payments. The move came to reciprocate what the remittance service providers in China did in February which was to join RippleNet. Canada’s Zip Remit and Brazil’s Beetech aim to bridge the gap in payments processing in order to make smooth transactions with their Chinese counterparts.
What Ripple had to Say about Payments and Remittances in Emerging Markets
Ripple’s Head of Business Development, Patrick Griffin, said in an interview that the need for a blockchain solution like Ripple in the global payments and remittance industries is very crucial. This is especially true for businesses and consumers in emerging markets, because fiat currency just won’t cut it anymore. Furthermore, Griffin reiterated how blockchain technology can make payments processing quite efficient. For instance, individuals who want to send money to their loved ones to their home countries from the other side of the world such as international businesses and expat workers can do that within a few minutes, and their contacts can get the money almost immediately.
Everybody suffers from the payment problem and it works against the customers of financial institutions instead for them, which is unfair to say the least, says Griffin.
Last January CNN reported that Ripple had partnered with MoneyGram as well as other remittance providers, who are among the largest in the world, to make business transactions via its blockchain network. Ripple is in the perfect position to create a thriving atmosphere for major remittance service providers in major economic centers like the United States as well as other emerging markets. This will give individuals a chance to send and receive small or large amounts of money at a much lower cost compared to traditional payment methods.
The goal is to establish a financial processing network between remittance providers where financial institutions can easily send and receive money to and from each other. This web-based peer-to-peer payment platform is going to be decentralized to reduce delays and costs.
At the moment, RippleNet has absorbed big remittance companies into its blockchain network from Singapore, China, and other countries in Asia. Singapore’s InstaRem by itself handles over half million transactions daily! Their customers come from more than 60 countries which include Australia, Canada, Hong Kong, Singapore and India. Add that to the other large-scale remittance service providers from other countries and you can see just how fast Ripple is growing.
