The Royal Bank of Canada published a report backing Ripple’s technologies and range of products to revolutionize the remittance and banking industries.
The Royal Bank of Canada (RBC) released a detailed report entitled “Imagine 2025,” which outlined the results of an ambitious six-month study designed to identify the changing forces and themes of global technological innovation. In the report, RBC acknowledged that blockchain is addressing vulnerabilities in the remittance industry, which the World Bank estimates at $ 640 billion by 2019. According to RBC, blockchain can reduce intermediaries and costs and provide more transparency in the industry. In the report, Ripple’s line of products, particularly the XRP token and ledger that went with it, was received with gusto.
Ripple created a decentralized open source peer-to-peer protocol with a network of participating financial institutions (RippleNet) and a range of custom technology solutions, including payment processing (xCurrent), liquidity support (xRapid) and payment access (xVia). . In this solution, XRP is used as a bridge asset. This means that it is a store of value that can be transferred between parties without a central counterparty and thus supports liquidity between any two currencies. As a result, banks can consolidate their liquidity in an XRP account instead of holding the local currency in accounts around the world. By creating the markets directly between the banks’ national currencies and XRP, the banks minimize the number of intermediaries.
According to RBC, RippleNet can cut average banking costs by 46% per payment. In addition, Ripple provides transparency regarding exchange rates and fees, as well as easy tracking of funds that are currently unavailable for cross-border payments between banks. RBC’s report says that the settlement time for transactions processed through Ripple is only 3 to 5 seconds, compared to the 2 to 3 day average that banks take for the same purpose.
Blockchain Use Cases
The RBC report also examined other use cases for blockchain: supply chains in the food industry, self-sovereign badges in healthcare, education, insurance, retail, and real estate transactions. However, it has been claimed that the remittance industry best illustrated the disruptive potential of the blockchain. Current traditional channels available to consumers are limited to commercial banks, consumer money transfer companies (like Western Union or MoneyGram), or online transfer providers like TransferWise or PayPal (Xoom). No wonder, then, that RBC announced in February of this year that it was testing Ripple’s technologies for a new proof of concept for distributed ledger-based transfers.
The wave effect
RBC, the largest bank in Canada with over 16 million customers in the country, is just one of the many banks Ripple has worked with to build a functioning blockchain ecosystem. SBI Remit partnered with Siam Commercial Bank in 2017 for the first commercially available Ripple-powered remittance service between Japan and Thailand. Standard Chartered announced its plans to expand the use of RippleNet to five more country pairs after the success in the India-Singapore corridor in 2017. Japan seems to be related to this ripple revolution. Money Tap, a Japanese money transfer platform that aims to connect 60 domestic banks through the Ripple network and integrate Ripple solutions for their mobile money transfer app, has just officially launched its website. The pilot results for xRapid in May showed that XRP reduced payment fees for financial institutions by up to 70%. These developments point to a bright future for XRP and Ripple, which have always been viewed as a payment solution rather than a true cryptocurrency.
Disclaimer: The information contained herein is provided without taking your personal circumstances into account and should therefore not be construed as financial advice, investment advice, or an offer or solicitation to submit transactions in cryptocurrencies.
Sign up for our newsletter and
Be the first to know!
Thousands of subscribers are already receiving their messages
fresh, FREE and delivered straight to your inbox.
THE BEST WRITERS, THE HOTTEST STORIES, ONCE A WEEK
We value your privacy, your email address is safe with us.