Ripple: Banks Unlikely to Apply Blockchain for Cross-Border Payments in Near Future
According to the reports by Reuters, on June 13th, 2018, David Schwartz, who is the chief in Ripple’s cryptography sector, made a statement claiming that the banks are unlikely to deploy the blockchain technology in order to process the international payments. He pointed out that the privacy problems as well as the low scalability as the reason behind it.
What exactly is David Schwartz’s Point of View?
Reuters had conducted an interview with David Schwartz, in which David had clearly argued on the fact that even though banks are willing to accept blockchain technology and claim that the technology would make transactions faster as well as it would cost lesser, the technology is not yet completely scalable and neither is it private.
Hence, quoting that the banks cannot implement this blockchain technology on a global scale.
David said the following in the interview with respect to their customers –
“What we hear from many of our customers is that it’s imperative to keep their transactions private, process thousands every second, and accommodate every type of currency and asset imaginable.”
Ripple’s xCurrent Technology
Ripple has announced that the xCurrent’s immutable “interledger” protocol offers an option for instant settlement, which clearly makes it superior to the other existing payment networks. But according to David, the xCurrent “is not a distributed ledger”.
According to Reuters, a number of banks have tested and incorporated Ripple’s xCurrent technology for cross-border payments that can “eventually plug them” into the distributed ledgers.
Basically, in the xCurrent’s case, the network peers do not have access to a shared ledger, which is the basis of the major blockchain networks like the Ethereum (ETH) or the Hyperledger.
Ripple’s senior vice president of the customer success sector, Marcus Treacher, claimed that Ripple had launched a project which offered the banks a “classic” blockchain-powered-payments.
But, the banks rejected the initiative by pointing out that one cannot just put “the whole world on a blockchain.”
Successful Ripple Technology usage
In supports for the claims by David as well as the entire Ripple team, the following two stats can be noted –
Financial institutions that took part in a pilot of Ripple’s xRapid platform reported, in the month of May, how the transaction savings turned out to be between 40-79 percent. They also noted some significant amount of improvement in the transaction period, which ranged from an average of 2-3 days to “just over two minutes.”
Spanish-based international bank Santander confirmed, in the month of April, about the launch of its Ripple-powered blockchain payment network One Pay FX, which is apparently becoming the first bank ever to implement such a network.