Ripple Gets Adopted for Cross-Border Payments

Ripple may not grip the public consciousness to the extent that Bitcoin does, but recent announcements stand to increase its profile. Kuwait’s first Islamic bank, the Kuwait Finance House (KFH) revealed in May that they had joined RippleNet, the blockchain network created by Ripple, for international remittance payments. The announcement came shortly after The National Bank of Kuwait declared their own plans to adopt xCurrent for instant cross-border payments for its customers.

RippleNet, a SWIFT-replacement global blockchain network, is used by over 100 financial institutions to clear and settle international transactions in real time, all with the benefit of end-to-end visibility for each payment. KFH touted RippleNet’s ability to provide faster, more efficient, secure, and transparent payments to its clients, all at a significantly lower cost than more traditional services. More specific details of the transaction have yet to be announced – while KFH has announced the Central Bank of Kuwait will need to approve the use of any RippleNet services, it is unclear if KFH will use xCurrent, Ripple’s software offering enabling settlement in fiat currency, or xRapid, which uses Ripple’s XRP token to offer instant liquidity in cross-border transactions.

Kuwait is not the first country in the Middle East to adopt RippleNet. The UAE Exchange joined the service in February 2018, while RAK Bank, the United Arab Emirates-based lender, joined the network in September 2017 to facilitate “instant, frictionless and secure money transfer services” to recipients banking with India’s Axis Bank (also a RippleNet member). The Saudi Arabian Monetary Authority, for all intents and purposes the central bank of Saudi Arabia, became the first central bank in the world to join RippleNet – it also utilizes the xCurrent service in conjunction with other regional banks.

Ripple’s first quarter in 2018 was a mixed bag. It made huge strides operationally, signing nearly two dozen first-time production contracts as its international partnerships, including one with remittance giant MoneyGram, continue to grow. Its XRP token, however, has mirrored the rest of the rapidly-changing crypto world with its volatility. This is partially due to price correlation between bitcoin and other cryptocurrencies – an association that Ripple CEO Brad Garlinghouse believes may be ending as investors better understand the independent use cases for each cryptocurrency. “It’s still a nascent industry…the speculation in the market dominates the trading activity. I think it’s a matter of time until people better understand the different use cases,” Garlinghouse told CNBC. Ripple is positioning itself for a bright future, growing pains be damned, offering a window into blockchain’s potential.
 

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