After raising over $ 55 million and cooperating an decent cooperation gained with the world’s largest banks, Ripple is aiming to transform the international bank exchange.
The decision of the American start-up Ripple to move to the banking sector was crucial to its development considering that it was initially created to serve as crypto-change. The Blockchain is now able to offer less expensive solution to the banks in the international instant cash transfers.
Ripple has over $93 million capital increase since its foundation in 2012. 30% of the world’s 50 largest banks are already using Ripple.
Ripple is in third place at the level of virtual currencies, just behind the Bitcoin and Ethereum.
An operation, which normally requires a delay of two to six days, becomes instantaneous with Ripple with a minimal commission on the transactions.
Ripple is also proposing to replace the expensive Swift correspondence which has lot of security problems and take care of the settlement, the assets transfer that usually takes place through an interbank payment network and the interzones payment mechanisms.
Ripple is therefore faster and cheaper, which is a key differential for the bankers.
For example, in a dollars’ transfer to euros from Canada to France, the money gets debited to the Canadian account then transferred to that through an intermediary but still in Canada. The latter sends the XRP equivalent to another intermediary in France that must have euros in its « pre-funding » and debit from his own account to credit the final customer. By doing this, only virtual money passes between countries.
Ripple remains nevertheless considered, like all virtual currencies, volatile but more stable than the Bitcoin or Ether because the two-thirds of the funds are held by Ripple Inc.
Ripple is working to replace the XRP with a crypto-currency issued by a central bank, this would be the ideal and feasible solution to avoid the problem of volatility, such as the Fiat Virtual Currency, Cad-Coin, which was created in Canada by the bank with the R3 consortium and the largest banks in the country.
Now the main use of Ripple at major banks like SAP, UniCredit UBS or Western Union, are the transfers between their own subsidiaries in different countries.
Ripple’s goal is to build an interbank system. It also aims to prevent small banks from going through larger players and paying them a commission.
Nevertheless, Ripple can really thrive only by increasing the number of its fellow players.