Here’s Why Ripple Inc Must Engage with Central Banks
Ripple (XRP) price action has not been as buoyant as that of most other altcoins or Bitcoin (BTC) for example. Despite the divergence, XRP started 2019 on a bullish note but its less than stellar performance at the moment is beginning to raise some skepticism with many in the crypto-sphere wondering about the coin’s future.
Ripple’s goal is to disrupt the legacy financial
institution’s dealings and take over from SWIFT with its faster and more
efficient blockchain based technology. Ripple’s Global Head of Infrastructure
Innovation Dilip Dao, has been at the forefront of
introducing Ripple’s novel system to central banks and other financial sectors
around the world.
Dilip will be in Vienna, Austria to take part in the World
Bank Fintech Conference on May 22 to 23rd. Hosted by the Vienna Financial Sector Advisory Center, Dilip plans
to converse with the global banking industry on fintech and its operational
lending arm. There, he will most possibly assist more financial institutions to
adopt Ripple’s DLT, since he has become very adept at selling Ripple’s products
to many a bank, including central banks.
But, if anything, this is a strategic move to focus to on
central banks because as a Ripple supporter, BankXRP,
rightfully tweets “central banks are
both regulators of their financial ecosystem. But they also operate the payment
system in their own country. They can be a catalyst for innovation“.
Already, Ripple has a partnership with the Saudi Arabian Monetary Authority (SAMA) where the central bank is tasked with promoting the technology in the Middle East. In fact, the decision by SABB to shift to xCurrent use could be attributed to this fruitful deal.
necessity of Distributed Ledger Technology
If every bank tow and migrate to an efficient network, then they
would save close to $400 million annually since as per World Bank
figures older technology charge around 7.1 per transaction. Besides the cost
benefits, Ripple’s platform can significantly speed up and lower these costs. Regardless,
SAMA is explicit saying they “support
innovation in the field of digital payments by encouraging local banks to use
the latest technologies and methods in this field.”
The signed agreement, however, did not require any of the institutions using Ripple’s products to purchase or deal with its currency, XRP. All the same, the KSA main regulator through its Head of Innovation Mohsen Al Zahrani, insist that they “will still work with Ripple to educate and encourage commercial banks to use their technology.”
In the Middle East, Ripple has, however, become a staple for cross border transactions and Saudi’s largest Islamic bank Al-Rajhi, is on RippleNet. Earlier, Dilip Intimated that with Dubai as its base in the region, Ripple is going to spread its tentacles the broader Asian banking market as it expands.