Ripple’s global head of banking says she believes some of the world’s biggest banks are gearing up to hold and trade digital assets.
In a new interview with Next In Tech, Marjan Delatinne says the current banking infrastructure is far too slow and inefficient at processing cross-border payments. Financial institutions, she says, are beginning to see blockchain technology as the solution.
“Our contribution to this digital era is building an infrastructure that helps financial institutions get closer to this reality of instant and convenient [payments]. When you look at the aging infrastructure that is in place today in order to transfer money around the world, this is very close to a fossil system. There is a trust established between members of these systems, but you still have a lot of inefficiencies in terms of the cost…
Our customer base realizes and recognizes inefficiencies and they look at the blockchain as a technology that can inherently diminish the operational cost and speed up the scale-up to bring new services in competition with established organizations.”
Delatinne says the ongoing global pandemic is accelerating the transition to a digital society, pushing banks to move toward instant payments and explore the potential of central bank digital currencies. She expects 10 of the top 20 largest banks in the world to hold or trade digital assets within the next five years.
In addition, she says crypto assets like XRP are poised to help banks bridge disparate central bank digital currencies that lack interoperability.
“I think one lesson learned from this pandemic is that we can do much better payments and the current system is not the most optimal way. There are different layers, and the real consequence of Covid-19 is the fact that the use of cash is declining because of health issues. If this trend continues and you need to somehow ship money somewhere, you’re going to see banks are going to have more pressure on them to get to the more digital world, and it’s pushing banks toward this digital world.
When you look at all these angles, then central bank digital currencies is probably a digital representation of money when you’re moving toward this system. What we see from central banks is there is now an interest toward really understanding how this can work… How this will work in terms of interoperability between each of them in the more international worlds – that’s probably going to be the digital currencies like XRP which can play a role in terms of playing a bridge between multiple or different CBDCs. I think these trends will continue and be reinforced in the coming years.”
You can check out the full interview here.
