FIs Leverage Blockchain to Power X-Border Payments

In discussions of blockchain technology and its effects on payments, the idea that cryptocurrencies like Bitcoin will replace fiat currency abounds.

While arguments for and against the feasibility of such a hypothetical future tend to divide opinion, several tokens are already powering cross-border transactions for some of the world’s largest financial institutions (FIs).

For example, the Ripple and Stellar blockchains with their respective XRP and XLM tokens have been deployed by banks and payment service providers for a range of international and domestic transaction types.

Since its inception in 2012, Ripple has distinguished itself from other blockchain projects in its design, governance and ambition, choosing to focus on bringing together FIs to realize the potential of distributed ledger technology and create a more secure transaction mechanism. efficient than those that characterize the global economy. today.

And among the products connecting the global network of banks and payment providers using Ripple’s distributed financial technology, known as RippleNet, is the on-demand liquidity solution xRapid.

See more : Ripple, Brazil’s Travelex Bank Adds Crypto-Based X-Border Payments

By using XRP tokens to create on-demand liquidity, xRapid seeks to reduce capital requirements for FIs transacting in multiple currencies, with significant benefits for transactions in emerging markets, where currency liquidity is typically low.

The latest companies to deploy xRapid payments on RippleNet are French FinTech Lemonway, which specializes in payments for marketplaces, and Swedish money transfer company XBaht, which enables cross-border remittances between Sweden and Thailand.

Related: Lemonway and Tink partner on open banking payments across Europe

Pay with Stablecoins, Fiat

Banks have also leveraged RippleNet to help streamline cross-border payments, allowing them to pass on lower transaction costs and faster processing times to customers.

Early adopters of the technology include US Bank of America and PNC Bank. But in recent years, Ripple has been gaining traction in Europe and the Middle East, with companies like Santander, Standard Chartered, and Qatar National Bank (QNB) rolling out the network to power cross-border payments.

Continue reading: QNB unveils new payment services in Qatar

Of course, cross-border transactions are not the only ones in need of more efficient solutions.

Prior to the recent announcement, Lemonway was already deploying the technology in euro-to-euro payment corridors through Nium’s global money transfer network, which uses RippleNet for its speed and cost-effectiveness.

However, Ripple is not the only player making waves in the blockchain space. As Nium’s Head of Crypto and Web3, Joaquin Ayuso de Paul, told PYMNTS earlier this year, Nium leverages another blockchain technology, Stellar, to help international customers pay in more than 100 currencies to more than 190 countries.

Read the interview: Market Crash Tests Crypto’s Survival of the Fittest

According to Ayuso de Paul, since Stellar makes it easy to leverage crypto assets, companies using Nium can leverage the technology to make payments with stablecoins on one end and shell out fiat on the other.

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