In this article, we will highlight the 20 leading partners of the Ripple network and help understand the actual role of XRP on it.
Banks join RippleNet to process cross-border payments in real-time with end-to-end tracking and certainty. Ripple cites that it has established a partnership with more than 300+ financial institutions for real-time, low-cost cross border payments.
Sometime around October 2019, Ripple made changes to the terminology of the products offered. Earlier, it used to offer three classes of services – xRapid, xCurrent and Via. xRapid was particularly of interest to the cryptocurrency investors because it made use of XRP as an intermediary between payments.
Now, it endorses only one product – RippleNet which is a network on which participants (Banks and Financial Service firms) made use of a standard platform to streamline trades, financial contracts, payments and remittances.
Bank of America
Reports of BOA testing Ripple’s technology had been rampant since 2016. Only recently, the executives at the BOA confirmed the partnership. Julie Harris – the head of global banking at Bank of America (BoA) told the media,
It’s about you as a client and the infrastructure you have and the ability for us to integrate, whether that’s with platforms and capabilities that we built or partnerships that we have with the likes of Ripple or Swift. These are Fintechs that we’re partnering with.
American Express and Santander
On 16th November 2017, Santander and American Express to streamline cross-border payments between the U.S. and the U.K.
It was during a time when the crypto bubble was still in the earlier stages. The announcement was huge for its investors. The price shot up by 35% in the intra-day trade on that day. Nevertheless, as the actual use of XRP was still unknown, it resulted in a ‘pump and dump.’
XRP/BTC 1-Day Chart on Bitstamp (TradingView)
SBI holdings Inc. in Japan has been a long-standing partner of Ripple since 2016. SBI has partnerships with both Ripple and R3 to streamline remittances and instantaneous cross border payments. Their payment model ‘Money Tap’ also leverages XRP as an intermediary for the payments.
A consortium of 47 banks is working towards a Ripple Solution to build an RC platform. This platform will act as the settlement layers for the payments and remittance between banks. Currently, it takes more around 2-3 days for confirmation and settlement of payments for cross-border transactions.
MoneyGram is one of the premier partners of Ripple as it is one of the few payment firms that utilize the XRP liquidity pool.
After the announcement of the partnership in June 2019, while XRP gained only 10-12% over the next few days, Moneygram stock price skyrocketed 160% opening with a huge bullish gap on a daily scale.
National Bank of Fujairah PJSC (NBF)
National Bank of Fujairah PJSC (NBF) is a sharia-compliant, partly state-owned bank in the UAE. In March 2020, it partnered with Ripple to capitalize on the benefits of RippleNet. The first remittance link will be formed with India’s Indus Lnd Bank to improve the speed, cost-efficiency and traceability of transactions.
MoneyMatch, a Malaysian FinTech provides the country’s small and medium-sized enterprises (SMEs) with a same-day, low-cost way to pay global suppliers. It is the leading payment/remittance solution providers in the country. It partnered with Ripple back in April 2018 and recently has been reporting a 40% reduction in their operating cost.
Standard Chartered Bank (SCB)
Dating back to 2015, SCB for long has shown interest in the Proof of Concept (PoC) payment using Ripple’s technology. It conducted the world’s first trade finance invoicing using the distributed ledger. In 2016, it went to make a strategic investment in Ripple to earn an observer board seat at Ripple.
Moreover, it is also a member of the rulemaking committee and the Global Payments Steering Group (GPSG) at Ripple which is drawing the standard set of rules for global transactions and settlements. Gautam Jain, Global Head, Digitization and Client Access noted in the press release,
As a leading international bank committed to digitization, our involvement in this group is only natural.
Westpac Institutional Bank and Bank of Australia
Australia’s leading banks, Westpac and Bank of Australia joined the network in August 2019 for streamlining international payments.
Royal Bank of Canada
The Royal Bank of Canada has shown interest in the crypto markets for a long time, including interests in cryptocurrency exchanges. In a report released in September 2018, the bank iterates that Ripple and the XRP ledger can reduce the transaction cost of banks by 46%.
RBC is a leading strategic partner of Ripple as well, as it is a member of the committee that helps in making the standard rules for DLT based banking transactions.
UniCredit, Reisebank, ATB, National Bank of Abu Dhabi, UBS and 2 others
Unicredit is an Italian global banking and financial services (FS) firm. It partnered with Ripple in June 2016 along with six other leading global banks to join the Ripple based payments which include Santander.
The joint press release by Ripple in 2016 mentions other notable entities in the global financial sector which includes,
- Reisebank, a German-based FS which deals in foreign currency dealing, precious metals and travel payment business.
- UBS Group AG, a Swiss multinational investment bank and Financial Services firm that serves in over 50 countries.
- Canadian Imperial Bank of Commerce
- Alberta Treasury Branches (ATB Financial)
- National Bank of Abu Dhabi
MUFG’s banking arm The Bank of Tokyo-Mitsubishi UFJ (BTMU) is an integral partner for Ripple working towards cross-border payments. It is also a part of the Global Payments Steering Group (GPSG) which outlines the rules and standards for Ripple based payments.
Hirofumi Aihara, General Manager, MUFG Digital Innovation Division notes in the press release,
“We are pleased to join Ripple’s Global Payments Steering Group, MUFG is working extensively in fintech to provide better services to our customers and society. Collaborating with other members of GPSG, MUFG will contribute to the creation of standards for Ripple’s network.”
The DBS Bank of Singapore is using Ripple for trade finance along with SCB. According to an update from Ripple, the bank leads in the implementation of FinTech innovations. For e.g., in India, DBS provides customers with almost an entirely digital experience through its mobile-only bank—powered by Artificial Intelligence.
The CEO of DBS Bank, Piyush Gupta recently labelled Ripple as the cheapest solution for making international payments.
The Ripple Rulebook
A committee of leading banking partners of Ripple has been building the ‘rulebook’ since 2015. This rulebook defines the framework for executing transactions on Ripplenet. It includes legal compliance, operational custody and, other standards for acting as the intermediary.
Mike Baldwin, Head of Transactional Solutions, Global Transactional Services at Westpac Institutional Bank
This is an important milestone for banks to embrace distributed ledgers in the move from proof-of-concept to commercial-ready solutions.
Role Played by XRP
XRP is the cryptocurrency which provides the bank with ‘On-Demand Liquidity.’ A liquidity pool of XRP which is used to source the international pool for the users of RippleNet.
In many cases after validation and confirmation of payments, the bank of the receiver is paid before getting a settlement from the payee’s bank. The actual settlement occurs during a later time. This is how the system has worked over the years, and even the transfer between customers takes 2-3 days.
While RippleNet aims to solve the problem of confirmation and DB management, theXRP on-chain liquidity aims to provide instantaneous conversion and payment into any FIAT currency on demand. According to Ripple, it will help reduce the cost for banks by 40-60%.
Currently, only Azimo and MoneyGram seem to be using On-Demand liquidity according to the official webpage.
Nevertheless, we are still in the early stages of innovation and change in the age-old FinTech system. Ripple, now competes with SWIFT, the network that currently facilitates global payments and is used by almost most banks. The increasing number of partners could begin to start utilizing the XRP pool with the growth of RippleNet.
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