San Francisco-based blockchain company Ripple recently announced that it had signed one of the top 10 US banks to use its blockchain technology for making international payments.
A significant move
Ripple has often been criticized in the cryptocurrency world for being its bank-focused blockchain solutions. Some community members even said that Ripple’s XRP is not a true cryptocurrency because of its highly centralized nature. However, despite a plethora of controversies and criticisms, Ripple has managed to persuade PNC Bank to use its blockchain-based solution.
PNC Treasury Management, a division of PNC Bank will be joining the RippleNet for cross-border processing payments easily. It managed over $400 billion in assets and is counted as one of the top 10 banks in the US.
RippleNet is a distributed ledger solution by Ripple that works like the Belgium-based interbank messaging system SWIFT. Several banks and financial institutions from across the world have joined RippleNet to use blockchains to make cross-border payments easier.
They can either use XRP as a bridge currency or avoid touching the crypto coin altogether and focus on making quick and cheap payments across the border. In standard international payments, processing could be both expensive and time-consuming. However, RippleNet removes both these pain points.
More acceptance for blockchain
PNC Bank is a heavyweight in the US financial sector that marks its presence in 19 states and serves over eight million customers. Ripple is one of the most prominent blockchain and crypto firms and operates XRP, the third-largest digital currency in the world. PNC’s adoption of blockchain paves the way for greater adoption of DLT in the banking and finance world. It also highlights that emerging technology has a serious upside potential over the legacy banking systems.
Previously, Ripple worked with money transmitter WesternUnion on a pilot project for cross-border transactions. While that study didn’t provide any significant advantage to WesternUnion over its existing systems, rival MoneyGram invested $30 million in Ripple. The international money transfer company is interested in using XRP for making cross-border payments.
With such big names being included in RippleNet, the network could become a rival for SWIFT. The network currently has more than 200 members across the world and has opened numerous payments corridors, especially in markets that have high remittance rates. This includes countries in Asia and Africa where banking access may be low, banking fee could be high, and remittance amounts go through the roof.