Banco Santander is the first bank to roll out a blockchain-based international payments service to retail customers in multiple countries simultaneously. The new service, known as ‘Santander One Pay FX’, uses Ripple’s xCurrent blockchain-based software solution for banks. Customers will be able to complete international transfers on the same day or by the next day. Its service will go head-to-head with fintech TransferWise.
Different payment options will be available in different countries. In Spain, for example, customers will be able to send dollars to the US and pounds to the UK. Customers in the UK will be able to send euros to 21 countries and dollars to the US. Customers in Brazil and Poland will be able to send pounds to the UK.
The announcement is being hailed as a big win for the cryptocurrency community because of Ripple’s technology, despite the fact that the new service is not using Ripple’s cryptocurrency XRP.
In June 2017, Siam Commercial Bank (SCB), the first bank of Thailand, became the first bank in Asia to use Ripple’s blockchain network solution for real-time remittance payments between Japan and Thailand.
Ripple’s settlement infrastructure technology is increasingly regarded as a banking solution. With xCurrent being built around an open, neutral protocol, Interledger Protocol (ILP) that enables interoperation between different ledgers and networks, the blockchain-based solution is designed to address a bank’s needs while complying with risk, privacy and compliance requirements.
XRP
Ripple has distinct components to its business model. xCurrent is Ripple’s enterprise software solution that allows banks to settle cross-border payments instantly with end-to-end tracking. XRP is the company’s digital asset that promises to scale to the same throughput as Visa. It commands faster speeds than Bitcoin and Ethereum, and it is the liquidity source for Ripple’s xRapid.
Although Santander is moving fiat and not utilizing XRP, Ripple’s CEO Brad Garlinghouse has tweeted in the past that banks are interested in using XRP.
XRP joins other cryptocurrencies in the push for mass adoption while also under the glare of the U.S. Securities and Exchange Commission, which threatens to curtail efforts.
In an interview with CNBC, Ripple’s chief market strategist Cory Johnson addressed the regulatory debates surrounding the classification of cryptocurrencies as securities as opposed to currencies, and the applicability of securities laws. “We absolutely are not a security. We don’t meet the standards for what a security is based on the history of court law,” he said.
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