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Ripple’s Japanese dreams: What is going on with their SBI partnership?

Anirudh VK



Ripple's Japanese dreams: What is going on with their SBI partnership?
Source: Unsplash

The Japanese market is being specifically targeted by Ripple, as seen from their partnership with SBI Holdings and the launch of SBI’s Virtual Currencies trading platform with XRP as an exclusive at launch.

slinuxuzer on XRP Chat Forums claims to have a theory that explains Ripple’s “very specific strategic reason” for entering the Japanese market. This is illustrated in his post on the forums, wherein he starts by establishing some basic facts about the Foreign Exchange [Forex] market.

The Forex market is one of the biggest markets in the world, with the global market transferring upwards of $5 trillion every day. This includes both the interbank and over-the-counter markets, which includes spot trading, forward trading, futures and many others. The part of the market that deals in Japanese Yen [JPY] has a share of about 21%, which translates to 950,000 billion every day. It is the third biggest currency being traded in the market, after USD and EUR.

slin makes the point that forex markets are subject to low regulation, with profit margins for brokers being razor thin. Moreover, forex transactions usually take about 2 days to complete, with some corridors finishing it in one day.

SBI Group is one of Japan’s biggest banking consortiums that represents about 80% of all deposits done in Japan. As Brad Garlinghouse, the CEO of Ripple, has stated, Japan’s inter-country payment rails are not up to the task, Ripple’s partnership with SBI is said to be in the pursuit of leapfrogging payment rails. However, SBI also operates a Forex division with over 1 million traders. Their most recent report mentions an alliance with MoneyGram and also references their partnership with Ripple, stating:

“Money transfer services between SBI Remit and The Siam Commercial Bank Public Company Limited, the largest private bank in Thailand, makes use of the next generation settlements platform (Ripple Solution) from Ripple of the U.S., to provide international remittance services founded on distributed ledger technology, with plans to employ virtual currencies in settlements.”

It was also mentioned that they are interested in creating a synergy between their Forex, Securities and Cryptocurrency businesses. Slinux believes that this synergy is indicative of Ripple’s plan “from the beginning” to target Japanese forex markets. He also made predictions as to the changes that this could bring to the price of the XRP token.

XRP capturing 1% of the Japanese Forex market would result in a $10 billion volume made in trades every day, which represents “one small piece, of one corridor, of one use case”. Comparing this against the circulating supply of the token, which is close to 20 billion, this will cause a “significant price increase”, says slin.

Forex traders are also incentivized to use XRP to decrease settlement times of transactions, which would in turn increase profit margins in an already competitive business. Moreover,  with the use of xRapid, capital in the form of nostro and vostro accounts would be freed up for use elsewhere.

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Anirudh VK is a full-time journalist at AMBCrypto. He has a passion for writing and interest towards the future of blockchain technology and cryptocurrencies. He does not own any cryptocurrencies currently.


Ripple’s initiative invests in Bolt Labs to improve secondary payment channels and expand interoperability




Source: Pixabay

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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