Ripple is in talks with Singapore’s financial centre to develop the use of blockchain technology in cross-border transactions.
Ripple, negotiating with the Monetary Authority of Singapore (MAS), hopes its technology will be used as part of the MAS’ experiment into the effectiveness of blockchains for cross-border payments.
The company, which set up an office in Singapore in September, is looking to target South-East Asia which, with high remittance demands, could be a place of great expansion.
Cross-border payments have historically been risky business. As well as an expensive process – the cost often being passed down to clients – banks have been unable to properly track them, effectively having to wait for confirmation from the recipient to know the transfer has been successful.
However, the technology Ripple is offering will shorten such transfers from days to a matter of seconds. Speeding this process could potentially save banks trillions in collateral held against settlement risks.
Ripple enjoys some big-name clients, including Swedish bank SEB, which has reportedly used Ripple’s technology to transfer $180m between Sweden and the US for a large corporate client.
In November, Standard Chartered and India’s Axis bank launched a cross-border payment system using Ripple technology but with fiat currency, not Ripple’s XRP.
However, there is potential that Ripple’s cryptocurrency might come in useful for banks attempting to send money into a country but who do not have an account with local currency. Banks around the world are waiting to see whether governments will ratify the use of XRP. If they do, this could open banks to new markets quickly and cheaply.
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