Ripple has begun targeting Asian markets for the propagation of their technology. More specifically, the settlements firm is focusing on the Japanese and Indian markets. Ripple’s Navin Gupta, the Managing Director for India, Southeast Asia, the Middle East and North Africa, recently spoke about these plans in an interview with TechCircle.
Ripple opened an office in Mumbai last year, keeping in view its expansion plans. Moreover, the firm has lately been adding the banks in India to its network of banks worldwide known as RippleNet. They also seem to be making moves to hold a dominant market share in the Indian market, with SVP of Product, Asheesh Birla, stating:
“We realized that if you get the top three banks in India onto Ripple, you get 80% of the market share. And then we looked at – where’s the future? And so we realized in the next five years, one billion people will become banked in India, but they’ll be banked through their phone. So then we started targeting mobile phone providers and telcos.”
Keeping this in mind, Gupta recently spoke in an interview about how Ripple wants to tap into the $70 billion remittance market. He also spoke about its solutions and the primary competitor it has in the field. Ripple is matched up against a 60-year old banking system known as the Society for Worldwide Interbank Financial Telecommunication, better known by the name SWIFT.
The legacy system reportedly has around a 6% error rate, something that Ripple aims to identify and improve through their solutions. Gupta stated:
“We are building a message-based superhighway through which money can travel and, mind you, they don’t have to be cryptocurrencies; fiat currencies can also travel via our blockchain protocol.”
Gupta also revealed details about other markets that Ripple is specifically looking at, such as banks in the Middle Eastern region. The area is famous for oil, and the underlying financial transactions are usually made in the millions. As seen above, Ripple seems to have a plan with every market they are targeting. Gupta stated:
“We are already working with several banks globally especially in the Middle Eastern region. We also have customers in Africa and Europe who are conducting millions of transactions via our network protocol instead of using SWIFT.”
Gupta went on to illustrate the various issues that SWIFT brings up, highlighting the high failure rate, liquidity and speed. The 6% failure rate of SWIFT and the liquidity to be stored in the form of nostro accounts are difficult pills to swallow for banks. Instead, Gupta stated, Ripple’s solution is built similar to messaging platform WhatsApp. He said:
“For example, if a bank wants to send money to another, then first it has to add the second bank to its trusted list, as you would do in case of a WhatsApp contact. The backend of the technology checks the name of the bank, account and does due diligence on all the anti-money laundering rules in place.”
He made the comparison to WhatsApp, stating that the blockchain protocol matches the transactions in terms of credit and debit with a settlement time of 3 to 5 seconds.
Gupta elaborated upon Ripple’s cutting-edge solution for cross-border payments known as xRapid, which utilizes XRP as liquidity for cross-border transactions. He also spoke about the constant use of xRapid between the payment corridor of Mexico and the United States, where XRP is used as a bridge currency.
On Ripple’s strategy in India, Gupta spoke at length about the size of the remittance market in the subcontinent. He said:
“India has the largest corporate and retail remittance market globally worth $70 billion and we are certain we will be able to grab a significant portion of that market with our new technology solution that has worked for other banks.
He also spoke about the expansion plans in the future, keeping in line the vision described by Asheesh Birla. The SVP had previously stated that they will have 50% of the market in India. He said:
“And so now, I think that in our pipeline we have probably 50% of the market in India, either integrated onto Ripple or in the deal, in the sort of pipeline to be signed to India. And guess what, we’re going to take that back to Wells Fargo, and we’re going to say it’s not a better way to send into India than Ripple.”
“We are working with four banks in India, Axis Bank, Yes Bank, IndusInd Bank and Kotak Mahindra Bank. We are talking to others and soon our list of banks will grow.”
The Reserve Bank of India is still negative on the state of cryptocurrencies in the country. Gupta spoke about this as well, and he stuck to Ripple’s vision of not going against regulators and working with them to provide payment solutions. He said:
“Regulators have to ensure that cryptos are not being misused and we entirely support that cause. It takes time for a regulator to make decisions and ensure that all tracks are covered and all stakeholders can continue to work in the best of conditions.”
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Ripple’s initiative invests in Bolt Labs to improve secondary payment channels and expand interoperability
Ripple’s arm, Xpring which invests and incubates in companies and individuals which help improve the XRP ecosystem, invested in Bolt Labs. With the new investment, Xpring hopes to develop solutions that will help improve the security of secondary payment channels and increase the interoperability by integrating with the ILP.
Bolt is a private, off-chain scaling solution which was built on top of Z-cash, a privacy-focused cryptocurrency, has attracted more than a few well-known investors in the crypto-space and Ripple’s Xpring is one among them. In a blog, Bolt Labs said that their solution will focus not only on ZCash but also other publicly available cryptocurrencies that do not have inherent on-chain privacy features.
It also stated:
“The potential for these implementations to be networked together with technologies like Interledger opens the potential further for cross-chain interactions with these privacy guarantees baked in.”
The above statement suggests that they might have a “potential” implementation for these on Interledger Protocol [ILP]. ILP was created at Ripple developed by the Interledger W3C Community Group. ILP aims at connecting two different blockchains, to integrate two different ledgers and have seamless operations between them.
This would vastly benefit the payments industry, which is facing a revolution at the hands of a nascent technology like blockchain. Ripple, a payments provider, which is leveraging cryptocurrency and blockchain to facilitate faster payments, would benefit largely from this partnership. In addition, this could also signify a potential development on the XRP Ledger and its on-chain/off-chain privacy and the currency, XRP.
A Twitter user @XRPCentre tweeted:
“If the solutions being developed by the company are able to improve the privacy of the ILP transactions, they would also be enhancing the privacy of XRP/ILP payments, which is a very demanded feature…. It’s all about interoperability and destroying network effects. If ILP succeeds in being the best protocol for cross-protocol/ledger transactions, you’d naturally search for the best asset therein.”
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