The first bank to officially use Ripple’s XRP-powered xRapid says it will fully integrate the technology in a matter of weeks.
Euro Exim Bank says it will begin using XRP in cross-border payments in the first quarter of this year. Graham Bright, the bank’s head of compliance and operations, told American Banker it ultimately plans to use the digital asset to power payments across 80 countries to demonstrate the speed and efficiency of cryptocurrency.
“There’s been a lot of talk around the markets about how blockchain technology can assist in trade finance. We’re interested in moving forward and creating a platform for payments for our clients who are in over 80 countries at the moment, making sure they have a smooth, frictionless way of paying local people.”
The current standard for international payments is the global network Swift, which is used by 11,000 banks and financial institutions around the world. According to Bright, one of Euro Exim Bank’s transactions on Swift’s network got lost this month, offering a prime example of why a shift to new technology is necessary.
“It was lost somewhere in the quagmire of a central organization, and we have no visibility on where it is. All the counterparty says is, ‘We have not received your message.'”
Ripple’s xRapid allows banks and financial institutions to send international payments by exchanging their local currency to XRP. The digital asset is then sent across borders and converted to the local currency in a corresponding country – all in a matter of seconds.
Ripple has partnered with four cryptocurrency exchanges to act as bridges and execute XRP transactions via xRapid. For example, a bank can exchange dollars to XRP through the crypto exchange Bittrex, which in turn sends the XRP to the Mexico-based crypto exchange Bitso. Once Bitso receives the XRP, it instantly processes the conversion from XRP to the Mexican peso, and then delivers it to the designated Mexican bank in real time.
Ripple’s global head of strategic accounts Marcus Treacher says xRapid will give international companies a new way to send value without parking money in various currencies around the world.
“When you use XRP, instead of having to pre-park all your money in foreign accounts around the world, you hold your funds locally, under your control, your stability, your creditworthiness. It’s a much better position structurally. You can move funds from your local account, Brazilian reals, for example, into the target account, euros, say, in two minutes.”
Euro Exim Bank, which has offices in London and St. Lucia, says it first became interested in Ripple’s xRapid after being invited to the San Francisco startup’s Swell conference in October of last year.
That’s when Ripple announced its official roll out of xRapid for commercial production.