Financial innovation company R3 and twelve of its consortium member banks have trialed Ripple’s distributed financial technology and the potential for its digital asset to scale liquidity and reduce the costs and inefficiencies of interbank cross-border payments.
Banks traditionally provision liquidity for cross-border payments by holding various currencies in local bank accounts around the world, known as nostro accounts. The practice of holding various currencies across many accounts is costly because banks have to fund those accounts, trapping capital. The emergence of digital assets offers an alternative to this process.
Andrew Irvine, Head of Canadian Commercial Banking and Partnerships, BMO Bank of Montreal, said:
“This technology will be a catalyst in reducing complexity, streamlining processes and ultimately lowering the significant costs associated with interbank cross-border payments, which will benefit both banks and their customers in the years ahead.”
Phil Griffiths, Senior Vice-President, Global Transaction Banking, CIBC, added:
“A more efficient global payment system is all about making payments faster, easier, and more transparent for businesses and consumers. Using innovative technology to rethink traditional processes is exactly what’s needed to give businesses everywhere an easier way to send and receive payments, and we are very active in making that a reality for our clients.”
Digital assets can enable near real-time value exchange anywhere in the world, providing liquidity on demand and reducing associated costs. Of the popular digital assets today, XRP boasts the fastest settlement speed, settling in about five seconds or less. This trial introduced XRP to test the feasibility of reducing or retiring the use of current nostro accounts for local currency payouts.
The trial demonstrated that the Ripple network could enable banks to make markets for fiat currencies using XRP and then complete authenticated payments without multiple nostro accounts. Through a series of transactions, the participating banks explored how Ripple’s solution and XRP could enable both cost-cutting opportunities and revenue opportunities.
The trial was carried out over the Ripple network in R3’s Lab and Research Centre, which has quickly become a center of gravity for collaborative research and testing of distributed and shared-ledger inspired technologies.
R3 member banks involved in the trial include Barclays, BMO Financial Group, CIBC, Intesa Sanpaolo, Macquarie Group, National Australia Bank (NAB), Natixis, Nordea, Royal Bank of Canada (RBC), Santander, Scotiabank, and Westpac Banking Corporation.
David Rutter, CEO of R3, commented:
“The tradition of holding numerous currencies across multiple accounts in different countries is costly and inefficient. This is a legacy issue from a time when the technology did not exist to offer a viable alternative, however digital assets and distributed ledgers can now enable real-time exchange of currencies between parties anywhere in the world without the need for a third party intermediary. This prototype paves the way for a major overhaul of how banks process and settle cross-border payments.”
Carolyn Burke, Head, Regulatory Payments, RBC said:
“Trial projects like this and the knowledge we gain from them are helping us build a path for the future of payments and deepen the industry’s knowledge on the potential Blockchain may have for better payments management worldwide.”
Mike Baldwin, Head of Transactional Solutions, GTS, Westpac Institutional Bank, commented:
“Combining the use of digital currency on a shared ledger with our previous low-value, cross-border payment proofs of concept holds great promise for transformation across the entire international payments value chain as well as for financial inclusion.”
R3 is leading a consortium with over 60 of the world’s largest financial institutions to develop ground-breaking commercial applications for the financial services industry that leverage the appropriate elements of distributed and shared ledger technology.
Operating in New York, London and San Francisco, the R3 team is made up of financial industry veterans, technologists, and new tech entrepreneurs, bringing together expertise from electronic financial markets, cryptography and digital currencies.
The R3 Lab and Research Centre has quickly become a centre of gravity for collaborative research and testing of distributed and shared-ledger inspired technologies, and is where R3 works with its partners to define, design and deliver the next generation of financial infrastructure.
Ripple provides global financial settlement solutions to ultimately enable the world to exchange value like it already exchanges information – giving rise to an Internet of Value (IoV). Ripple solutions lower the total cost of settlement by enabling banks to transact directly and with real-time certainty, optionally using the digital asset XRP to further reduce liquidity costs. Banks around the world are partnering with Ripple to improve their cross-border payment offerings, and to join its growing, global network of financial institutions and liquidity providers.
Ripple is a venture-backed startup with offices in San Francisco, New York, London, Sydney and Luxembourg. As an industry advocate for the Internet of Value, Ripple sits on the Federal Reserve’s Faster Payments Task Force Steering Committee and co-chairs the W3C’s Web Payments Working Group.
- Storj Labs Raises $3 Million in Seed Funding - February 26, 2017
- Northern Trust And IBM Pioneer Use Of Blockchain Technology To Help Transform Private Equity Administration - February 26, 2017
- 0x – An Open Protocol for Decentralized Exchange on the Ethereum Blockchain - February 26, 2017
- Global Blockchain Project FERMAT Announces Significant Alpha Release for the “Internet of People” - February 26, 2017
- Blockchain Startup Peerplays Raises $4m Before ICO Even Kicks Off - February 26, 2017
- Numerai Launches Cryptocurrency and New Hedge Fund Built By Data Scientist Network - February 26, 2017
- Disrupt the VC Industry? Brock Pierce and Blockchain Capital to Launch Own Cryptocurrency and ICO - February 26, 2017
- SoftBank, Sprint and TBCASoft Partner in Blockchain Technology for Telecom Carriers - February 25, 2017
- Lisk Introduces New Blockchain Technology Update - February 25, 2017
- Dash Partners with BlockPay to Enable Point of Sale Purchases at Brick and Mortar Stores - February 25, 2017
- Blockchain Interaction Unit (BIU) – No Internet, No Mobile Phone, No Computer. No Problem. - February 25, 2017
- Blockchain Banking Consortium R3 Gets Into Semantic Tornado Over Blockchain – Bitcoiners Jeer from Sidelines - February 25, 2017
- IOHK and University of Edinburgh Establish Blockchain Technology Laboratory - February 24, 2017
- Liberland to Launch Online Startup Contest to Kick Off Smart Nation - February 23, 2017
- Blockchain Intelligence Group Launches QLUE Version Codename Deep Cove - February 23, 2017
- Lykke Crowdfunding – One -year Lykke Forward Offering - February 22, 2017
- Daimler AG Joins Hyperledger Blockchain Consortium as Premier Member - February 21, 2017
- Voatz and Clear Ballot to Explore Blockchain Technology for Remote Voting - February 20, 2017
- New Blockchain Smart Contract Token Developed By GameCredits - February 20, 2017
- Blockchain Could Be a New Operating System for the Planet Says Jeremy Wilson, Vice Chairman of Barclays Corporate Banking - February 20, 2017
- JAAK and the Guardian Initiative Announce MΞTA: A Blockchain Pilot for The Media & Entertainment Industry - February 18, 2017
- The StabL Project – Hadrien Charlanes Plans Stable Tokens and Derivative Products For Ethereum Blockchain - February 17, 2017
- Blockchain Energy Trading Trials Kickoff with Canada’s BTL Group and Austria’s Wien Energie - February 16, 2017
- Smart Dubai Office (SDO) and 1776 Launch Blockchain Challenge - February 16, 2017
- BOScoin, a New Cryptocurrency, Introduces “Trust Contracts” to Overcome the Shortcomings of Ethereum Smart Contracts - February 16, 2017
- European Commission Working on Blockchain – Plans Actively Seeking Pilot Partners - February 16, 2017
- Canadian Blockchain Company SecureKey Awarded U.S. Department of Homeland Security Grant - February 16, 2017
- Microsoft and KPMG Cut Deal and Kickoff Blockchain Nodes in Frankfurt and Singapore - February 16, 2017
- Global Blockchain Project FERMAT Announces Significant Alpha Release for the “Internet of People” - February 16, 2017
- Russian Blockchain Startup Exscudo Aims to Bridge Traditional Finances And The Cryptocurrency Market - February 15, 2017
- Active Year Ahead for Blockchain Solutions in Financial Services, says Corporate Insight - February 14, 2017
- BlockApps and Red Hat Cut Deal to Deliver Hybrid Cloud Solution for Blockchain Applications in the Enterprise - February 14, 2017
- Hyperledger Blockchain Turns One – Director Brian Behlendorf Updates - February 14, 2017
- The State Bank of India Initiates National Blockchain Bank Consortium - February 14, 2017
- The National Bank of Abu Dhabi (NBAD) Introduces Real-Time Cross-Border Blockchain Payments - February 14, 2017
- China Turning Hard to Blockchain – Focus on Fraud Reduction - February 13, 2017
- U.S. Department of Health and Human Services to Kick Off Blockchain in Heathcare Code-A-Thon - February 13, 2017
- Hexayurt Capital presents the Internet of Agreements at the World Government Summit - February 13, 2017
- EquiChain – Blockchain for Emerging Markets Post-Trade - February 13, 2017
- UK Government Approves Tramonex Labs to Issue Currency on Blockchain - February 12, 2017
- US Congress Buckles Down With Blockchain – Launch Congressional Blockchain Caucus - February 11, 2017
- Nick Szabo: Some Private Blockchains Qualify as Bona Fide Blockchains - February 10, 2017
- Bitfury Group and Government of Georgia Expand Blockchain Land Titling Project - February 10, 2017
- Expanse Project Announces Launch of the Expanse Bond System (EBS) - February 10, 2017
- WISeKey to Establish IoT Blockchain Center of Excellence in New York - February 10, 2017
- Blockchain Startup Coinfirm Gets $700k Growth Equity Via VC Funding - February 10, 2017
- Blockchain Health Startup Hashed Health Raises Nearly $2 Million in Initial Funding Round - February 10, 2017
- IBM Kicks Off Blockchain Initiative with Dubai Government - February 10, 2017
- Blockchain Pioneer Medici Ventures Invests in Factom, Inc. - February 7, 2017
- Canadian Blockchain Startup Equibit Raises Quarter Million Dollars in Day One of Initial Coin Offering (ICO) - February 5, 2017