Japanese financial giant SBI Holdings is preparing to test the use of XRP in the foreign exchange (FX) market.
The pilot will utilize the cryptocurrency to execute cross-border currency swaps, according to the financial outlet Nikkei.
The test is designed to determine whether the speed of XRP can be used as a bridge asset to lower the risk of price fluctuations that can occur as one currency is traded for another, as well as determine potential savings on fees associated with the transfer.
To perform the trial, SBI is reportedly teaming up with the cryptocurrency startup FXcoin Ltd.
According to the Bank for International Settlements, trading in the global FX markets reached $6.6 trillion per day in April of 2019. Foreign exchange swap volumes are estimated to account for approximately half of the FX market.
Ripple and SBI are longtime partners, and SBI invested in the San Francisco-based payments company back in 2016.
That same year, the pair launched SBI Ripple Asia in an effort to bring payments powered by distributed ledger technology to financial institutions and remittance transfer providers in the region.
SBI is currently using Ripple’s payment messaging system, which is not based on XRP, to power its settlements platform Money Tap.
The company also allows shareholders to receive dividends in XRP, and gives gamers on its e-Sports team the option to receive their salaries in the digital asset.
Featured Image: Shutterstock/Sittipong Phokawattana