Ripple: Banks are unlikely to use blockchain for cross-border payments in the near future
As Reuters wrote on June 13, according to Ripple Senior Cryptographer David Schwartz, banks are unlikely to use blockchain to process international payments in the near future, citing low scalability and privacy problems inherent in blockchain. But, in his opinion, banks recognize the potential of blockchain technology in terms of reducing the time and cost of transactions..
The xCurrent system is, in Schwartz’s words, “not a distributed ledger.” In the case of xCurrent, the nodes of the network do not have access to the general ledger, whereas in large blockchain networks like Ethereum and Hyperledger this is a fundamental element..
“For many of our clients, it is imperative that their transactions remain private so that the system can process thousands of transactions per second, and that it is compatible with any type of currency or asset imaginable,” Schwartz said..
Markus Treacher, Ripple’s senior vice president of customer experience management, said his firm first launched an initiative to offer banks “classic” blockchain payments. However, the banks rejected it because it cannot “put the whole world on the blockchain”.
According to Reuters, several banks have already tested and implemented xCurrent technology for cross-border payments, resulting in “realizing the power” of distributed ledger technology..
In May, financial institutions that took part in the pilot launch of Ripple’s xRapid platform reported that the cost of transactions was reduced by 40-79%, and the execution time on average decreased from 2-3 days to “just over 2 minutes.”.
In addition, in April, Spain-based international bank Santander confirmed the launch of Ripple’s One Pay FX blockchain payment system, arguably the first bank to launch an initiative of this kind..
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