Ripple’s chief technology officer says some of the world’s largest companies can benefit from the use of digital assets.
At the recent WeAreDevelopers conference in Berlin, Germany, David Schwartz talked about Ripple’s efforts to work with banks and financial institutions to improve the speed and cost of cross-border remittances.
According to Schwartz, corporate giants like Amazon and Uber would reap the rewards of mass adoption of digital assets like XRP, allowing them to pay international employees in an instant without having to hold various currencies in banks around the world.
“If you’re a Seagate or an Amazon or an Airbnb or an Uber, these companies all make large numbers of small payments. Amazon has thousands of merchants that they make payments to. Uber, if you’re in the Philippines and you’re a driver and you need money for milk, Uber would love you to drive for them and buy milk right that day.
But they need efficient payments. They need payments that are as reliable as email for that to happen. And that doesn’t exist. And each of these companies employs literally hundreds of people just in their payments division. And if you imagine if you ran a payment company, you would love to go to any of these new corporates and say, ‘Hey! Fire your hundreds of payment people. We’ll do all your payments.’ But there’s nobody who can do that.”
Schwartz says he believes XRP is well-positioned to power a payments revolution because of its speed and low transaction fees.
“We came up with what’s technically a form of federated Byzantine agreement that we call consensus that’s faster and cheaper than proof-of-work. And the result is that XRP is a decentralized digital asset not connected to any jurisdiction, that moves more quickly and more cheaply than Bitcoin. And I would argue that it’s also more censorship-resistant and has some of the decentralization properties that we want. And that’s resulted in low cost, low fees and high transaction volume with low latency…”
“Ripple has built an enterprise payment network on these principals. It consists of three products. One to process real-time payments. One is sort of like the browser to send payments. And one to provide on-demand liquidity.
Financial institutions use xCurrent to make and receive payments, xVia to initiate payments and xRapid to provide cross-border liquidity. And this is a real network. This is a point-to-point network. It’s not a central server like Swift or PayPal. This is a decentralized network where financial institutions interact with each other through protocols that are not centrally controlled.”
Regulation and education are the two biggest hurdles in the way of mass adoption of digital assets for payments, says Schwartz. So far, Ripple has more than 200 clients. Most of those banks and financial institutions are using Ripple’s payment messaging software xCurrent, with about 20 using Ripple’s XRP-powered remittance solution xRapid.
“The biggest obstacle that we’ve found is the legal environment. Enterprises are not ready for a trustless system that’s proven by mathematical algorithms. They have customers who might get their credentials stolen. They might want to go to court. One of the biggest things that we had to do to revolutionize enterprise payments was to come up with a set of rules so that legal agreements can be negotiated with just a couple of redlines rather than a 40-page contract beginning to end of how to handle every possible failure…
So today, our customers use digital assets to settle payments immediately where that makes sense, and they use more conventional means where that makes sense, but they enjoy the benefits of end-to-end messaging, multi-hop and the various things that a multi-standard can provide. We think that digital assets and interledger payments can build that internet of value.”