In an official press release issued by the MUFG on November 9, 2018, the finance giant announced the signing of a Memorandum of Understanding To Develop A New Cross-Border Payment Service as part of a joint effort between MUFG and Bradesco.
The Brazilian subsidiary of Japan’s largest bank signed an agreement with Sao Paulo-based Banco Bradesco, a leading universal bank in Latin America, with the intention of creating a platform that allows money transfers directly and without intermediaries through a secure, economical and fast protocol.
According to MUFG, both parties trust that Ripple Inc, the creator of the XRP is the best option to give life to the project:
“Through this MOU, MUFG Bank has decided to start the collaborative development for cross-border payments between Japan and Brazil, utilizing Ripple’s cutting-edge technology. The new payment system – developed by Ripple, a San Francisco-based software vendor – will assist the banks as they work toward commercializing a high-speed, transparent and traceable cross-border payments solution between Japan and Brazil”.
With this new agreement, Ripple continues to consolidate its position as a leading company in the financial services market. Since the release of xRapid a few weeks ago, the valuation of the company and its public image have been steadily improving.
MUFG: Deeply Interested in Ripple
MUFG had already publicly talked about its interest in Ripple’s blockchain project. In a conference published in September by Steven Diep, a representative of the bank commented how Ripple could provide more satisfactory results than those traditionally obtained using the SWIFT messaging system:
“Today, for many of us, we may have to go through SWIFT and encounter charges; many intermediary banks are part of that, and typically an SLA for fund transfer or movement is between one and three days.
Using technology such as Ripple, we can get that done to something like 30 seconds, which is significantly different and at a cheaper cost as well in terms of moving money between our branches, between our different countries within our network. That’s really important to us.”
During the last few days, the adoption of Ripple’s technological solutions has allowed its Token XRP to have a bullish streak that drove it to surpass Ethereum’s market cap, albeit for short periods of time.
Recently there was much speculation about a possible partnership between Ripple and SWIFT itself; however, it seems that SWIFT is more interested in competing than partnering, and the team is focusing their minds on developing a proprietary blockchain.
It is not easy to predict when the use of this platform would be implemented, but the memorandum of understanding lays the foundation for possible future collaboration between the two financial institutions.