The World Bank (WB) has praised blockchain technology and Ripple’s xRapid product as a potentially transformational technology. In a new post written by members of the Better Than Cash Alliance, they mention that traditional business to business remittances are slow and opaque.
World Bank Recognizes Ripple’s Potential
The World Bank is currently praising Ripple’s xRapid as a transformational technology. They compare it with the “slow and opaque” traditional business to business remittance services. Marc Nicoli, the World Bank’s senior financial sector specialist, believes that the deficiencies in the traditional financial sector are allowing new technologies to grow.
On the matter, Nicoli commented:
“These shortcomings make the cross-border payment industry ripe for disruption and innovation. Some see distributed ledger technologies (DLT) as having the potential to drive industry-wide change. Indeed, B2B cross-border payments, traditionally characterized by fragmentation and opacity, are a potential use case for the successful implementation of DLT…”
As he explained, using DLT solutions could reduce compliance costs and also improve the traceability of transfers. That would have a very positive impact on financial transparency. By increasing the transparency of the transactions, the confidence in the banking sector could also increase.
The report goes on talking about Ripple. It says that the fintech company has created the xRapid product and that it was able to save between 40% and 70% in foreign exchange costs while making transactions between Mexico and the United States. Using XRP to source liquidity would allow firms to send transactions in just 3 or 4 seconds, compared to hours or days using traditional systems.
In addition to it, there are other countries and corridors in which xRapid is already operating, including the Philippines, Mexico, the United States and Europe. Some exchange such as Coins.ph, Bitso, and Bitstamp are helping Ripple source liquidity on demand.
In the report, they also mention that there are other attempts such as the JPM Coin or Swift’s distributed ledger proof-of-concept. This shows that there is a clear interest in starting to use blockchain technology to transfer funds from one country to another or for settling transactions among customers.
Ripple has already more than 200 partners that aim at reducing their costs and improving their services. In the future, many other companies could start embracing Ripple’s technologies.
Currently, each XRP coin can be purchased for $0.312 and it has a market capitalization of $13.03 billion.