A Japanese banking consortium and South Korea’s two largest banks have partnered to commence a new pilot program using Ripple technology. Its aim is instant money transfer across borders and anywhere in the world, at far lower costs than current systems.
According to the Ripple Blog, the pilot program will make use of xCurrent technology, Ripple’s settlement technology. The pilot includes 61 Japanese financial institutions including Sumitomo Mitsui Banking Corporation, and South Korea’s two major banks — Woori Bank and Shinhan Bank, which collectively have a market cap of $30 billion USD.
The initiative will decrease international funds transfer costs by 30 percent. Additionally, it aims to send money globally in real time, i.e.: to achieve same-day global fund transfers.
Emi Yoshikawa, Director of Partnerships at Ripple, said: “The Japan Bank Consortium’s pilot with Woori Bank and Shinhan bank brings us closer to sending money into an important corridor.”
If the trial run is successful throughout December, then cross-border payments between the Japanese and South Korean banks will commence on January 31st, 2018. Ripple’s blockchain-like consensus platform has already been successfully tested for domestic transactions in Japan.
In 2017, Ripple has made significant progress in helping major global banks, particularly Japanese banks, by incorporating its breakthrough blockchain platform with the banking infrastructure. Japanese banks have quickly adopted the technology. The innovative blockchain technology removes the requirement for a centralized clearing system.
July this year, Marcus Treacher- Global Head of Strategic Accounts said: “We commend these banks in Japan for taking a giant step forward on behalf of their customers. This is a great example of regional banks converging into a global real-time payments network for the greater good.”
Ripple price spiked to over 80 cents in the wake of the announcement. According to CoinMarketCap, this week’s price hike has put Ripple at the fourth place in the crypto market, just behind Bitcoin, Ethereum and Bitcoin Cash, with a market cap of $29.8 billion.
Introduction of RippleNet into the banking system will solve a major global issue — instant and inexpensive cross-border payments — that the multi-trillion dollar financial industry faces.
The new pilot program will ensure the first fund transfer between Japan and South Korea over the blockchain platform. The Japan Bank Association, an alliance of 61 Japanese banks, has also joined hands with SBI Holdings and SBI Ripple Asia to perform transactions on the Ripple network.
Yoshikawa stated, “The use of RippleNet to send cross-border payments reinforces that financial institutions are ready to provide a modern payments experience and enable to the Internet of Value.”
The decision to use the pioneering technology will give zeal to the idea of the Internet of Value. Internet of Value allows foreign currency transactions instantly, where the current banking infrastructure (i.e.: the SWIFT Network) takes 2-3 days.
Per the Ripple blog, “The Internet of Value will enable the exchange of an asset that is of value to someone, including stocks, votes, frequent flyer points, securities, intellectual property, music, scientific discoveries and more.”
Recently, SBI Ripple Asia chief executive Takashi Okita said:
“South Korea is one of the most active markets worldwide when it comes to blockchain innovation and trading of digital assets. With trade flows into and out of the country totaling $960 billion every year, we also see a high end growing demand for Ripple’s frictionless payments solution in the country.”
It seems Ripple will be an integral part of the modern blockchain banking economy.
What will Ripple hold for its clients in the year 2018? Let us know your views in comments section below.
Images via Ripple, Woori Bank