Tobias Lewis
Ripple faces new threat as central banks create working prototypes of a rival cross-border payments system
Contents
- Project Dunbar:an institutional Ripple competitor?
- Multiple prototypes are ready
The Bank for International Settlements (BIS) Innovation Hub, a company owned by 63 central banks representing countries that make up 95% of global GDP, is creating a platform for international payments that would directly compete with Ripple. The announcement made by BIS yesterday for the launch of "Project Dunbar"comes after recent news about Ripple partners making progress on a SWIFT replacement system and RippleNet being listed as a SWIFT competitor by an Arab Monetary Fund group.
Project Dunbar:an institutional Ripple competitor?
In a press release, BIS announced that the central banks of Australia, Malaysia, Singapore and South Africa were developing a "shared platform that could enable international settlements using digital currencies."The aim of the project is to "facilitate direct cross-border transactions between financial institutions in different currencies,"in a cheap and efficient manner.
Project Dunbar, much like Ripple, aims to replace the old, slow and expensive correspondent banking model of international transactions that is reliant upon financial institutions holding foreign currencies and often requires single payments to pass through multiple institutions before it is settled. Under Project Dunbar, there would be no need to rely on intermediaries holding foreign currency reserves, thereby decreasing the cost and time requiredfor cross-border transactions.
Project Dunbar, focusing on "international settlements using multi-CBDCs,"therefore seems to be directly lining itself up, with institutional backing, against Ripple-aligned players like The Clearing House, whose RTP Service is designed to facilitate transactions within "the digital, on-the-go way we live and work today."
Multiple prototypes are ready
BIS claimed they had successfully developed two prototypes for their common international settlement platform, Corda and Partior. In response to the complete report, Sopnendu Ohanty, the chief fintech officer at the Monetary Authority of Singapore, said that "Project Dunbar marks a key milestone in advancing the efficiency of cross border payments globally."
FAQs
Ripple collaborates with financial institutions worldwide; more than 100 financial institutions have joined RippleNet, including: Santander (USA) Canadian Imperial Bank of Commerce (Canada) Kotak Mahindra Bank (India)
Will Ripple be used for CBDC? ›
Ripple is continuing its expansion into Latin America. The software company founded by the creators of the cryptocurrency XRP today announced it has signed a deal with Colombia's central bank to explore central bank digital currency (CBDC) technology.
What is Ripple's connection with the IMF and central banks? ›
The International Monetary Fund (IMF) has announced its development of a platform for a central bank digital currency (CDBC). Interestingly, it has been discovered that Ripple, the blockchain company, was considered by the IMF in a report from March 2023 as a potential solution to specific challenges.
How does Ripple solve cross-border payments? ›
The Bridge Currency Concept:
When financial institutions and individuals need to transfer money between two different fiat currencies, they can use XRP as an intermediary. This eliminates the need for multiple correspondent banks and minimizes the fees and time required for these transactions.
Is Ripple being used by banks? ›
Ripple (XRP) ranks among the most valuable blockchain-based tokens by market capitalization. The Ripple payment system is intended to be used primarily by banks, but individual investors can speculate on the price of XRP.
Are banks going to use Ripple? ›
XRP, the native cryptocurrency of Ripple, will soon be the currency of choice for banks in cross-border payments. That's according to the exchange's General Counsel Stu Alderoty, in an interview with CNBC.
Can banks use Ripple without XRP? ›
Can Ripple Exist Without XRP? Ripple, the company, could continue to exist without XRP. In addition to creating the RCL Ripple built a suite of products called RippleNet that are marketed to banks, payment providers and digital asset exchanges as frictionless way to send money globally.
How are banks using Ripple? ›
Released in 2012, Ripple and the XRP token were designed to offer cheap, trustless and instant international payments to banks and other financial institutions worldwide. Powered by blockchain technology, the Ripple network validates transactions in a way similar to the proof-of-stake (PoS) consensus method.
Who is Ripple partner with the Federal Reserve? ›
Designed by the Federal Reserve, the system uses technology powered by Volante—a Ripple partner—as one of the companies supporting the Fed initiative. That has led to speculation that Ripple's indirect involvement could speed the use of XRP.
Why choose Ripple's CBDC platform? ›
According to Ripple, some of the primary benefits of digital currencies such as CBDCs and stablecoins include faster transaction speeds, lower costs, and reduced settlement times.
A Closer Look at Which Banks Use Ripple XRP
- PNC Bank joined Ripple in 2016 to improve its network speed. With 12 million users, the RippleNet service allows the bank to facilitate quick payments.
- Santander Bank has been using Ripple since 2018. ...
- Cuallix partnered with Ripple in 2017.
In the 34-page ruling on Thursday, Judge Analisa Torres of the U.S. District Court for the Southern District of New York said that Ripple did not break the law when the cryptocurrency it created, XRP, was sold on public exchanges. The ruling was not a complete victory for the industry.
What is Ripple trying to solve? ›
Ripple is a for-profit technology company that uses blockchain to let financial institutions worldwide make cross-border transactions faster, cheaper, and more reliable. To aid its ambitions, Ripple has crafted various products and initiatives like RippleNet, XRP Ledger, and Interledger protocol (ILP).
What problems does Ripple solve? ›
Ripple created XRP to operate the network as an alternative to SWIFT, offering transaction speed for more efficient international payments and faster cross-border transactions. Ripple's token is handy for little-traded currencies that may require an intermediary medium of exchange to be swapped cheaply.
Who accepts XRP as payment? ›
AMC Theatres, Gamesplanet, Prepaid Gamer Online, and Play-Asia.com are some of the top businesses which accept XRP in exchange for movies, games, and other amusem*nt products. Notably, CryptoTurismo is a tourist business where XRP is tenable.
Who are the largest shareholders of Ripple? ›
The addresses holding the most XRP coins generally belong to the project founders and executives, including Chris Larsen and Brad Garlinghouse, and centralized exchanges such as Binance, Kraken, Uphold, Bitbank, and others.
