Pack It In a Suitcase
Ripple Network, the global blockchain-secured, cross-border interbank payment system, whose CEO Brad Garlinghouse once quipped that the fastest way to send money to London was to pack it in a suitcase and get on a plane, has extended and expanded its global network to include Brazil's biggest bank.
According to the company's website, Itau Unibanco, Latin America's largest bank by market cap, will begin using Ripple's xCurrent system. xCurrent is a cross-border interbank settlement solution that employs pre-transaction validation, cryptographic hold of funds, and simultaneous release of funds across all bank ledgers to achieve speed, transparency, cost savings and security.
Ripple is already dominant in Asia with SBI Ripple Asia, a consortium of more than 60 banks using Ripple for inter-bank transfers.
Others also signing on to Ripple's xCurrent solution include a major remittance provider in Singapore and a large private sector Indian bank. The global remittance market is projected to grow to $466 billion in 2018 - with India and China dominating that growth. According to the IMF, emerging markets account for approximately 60 percent of global GDP.
Not Like Other Cryptos
XRP, the native cryptocurrency of the RIpple ecosystem, is not like other cryptocurrencies in that it is not mined nor is it used as an actual medium of exchange - it is more like a bridge currency for international payments that is guaranteed and backed by traditional fiat currencies.
Ripple created XRP tokens for seamless transactions between banks, allowing them to be nearly instantaneous and almost free.
There are several advantages to this system over typical cryptocurrencies. Most notably, it integrates with the bank's existing systems, weaving the security of blockchain-powered smart contracts into a patchwork system that some banks may be hesitant to suddenly swap out for a completely new and untested entity.
No Mining Backlog
Since XRP is not mined, there is no cryptographic hashing to delay transaction confirmation times. Instead, blockchain-based smart contract technology, namely cryptographic "locking" and simultaneous release of funds across all ledgers allows for quick, seamless, inexpensive transactions, without requiring a trusted intermediary.
Investors in XRP hope that as banks and remittance services become more comfortable with Ripple Network's blockchain channels, the more likely they will be to adopt XRP as their go-to medium of exchange for cross-border payments.