The San Francisco-based financial technology company Ripple has signed up seven more banks to potentially use its blockchain for cross-border payments.
Santander (SAN), UniCredit (UNCFF), UBS (UBS), Reisebank, CIBC, ATB Financial and the National Bank of Abu Dhabi said Wednesday that they were working with Ripple’s technology, which uses a distributed ledger of the sort that also underpins bitcoin.
These automatically-generated ledgers have no central operator and, as they are filled, the entries become irreversible and resistant to tampering. Ripple’s ledgers hold order books with bid and ask offers, and it claims its “path-finding algorithm” finds the lowest foreign exchange rates.
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Canada’s ATB Financial and Germany’s ReiseBank used the system to make a demonstration fund transfer last week.
“Using blockchain technology, ATB Financial became the first financial institution in Canada to complete an overseas payment in a matter of seconds. Without blockchain, that transaction would have taken two to six business days,” ATB chief strategy and operations officer Curtis Stange said in a statement.
Ripple said its network now includes 12 of the world’s top 50 banks, and it has 10 banks in “commercial deal phases.”
If you want to see how its ledger-filling system works, here you go:
[youtube https://www.youtube.com/watch?v=pj1QVb1vlC0&w=420&h=315]
Meanwhile, also in the world of blockchain technology, social payments firm Circle has raised $60 million from Chinese investors, led by IDG Capital partners.
Circle, which already enjoys the backing of Goldman Sachs (GS) and others, lets individuals send money to one another across borders, with bitcoin’s blockchain as the underlying platform. It is currently partnering with banks such as the U.K.’s Barclays (BCS).
For more on blockchains, watch our video.
In a Wednesday statement, Circle said it was developing a “China-native company” as it works towards a commercial launch in that country. In the meantime, it said, it will follow up its U.K. Launch with a broader European rollout, starting in Spain.
The U.S. Financial Stability Oversight Council, whose members include heads of the Federal Reserve and the Security and Exchange Commission, said this week in its annual report that distributed ledger systems such as Ripple’s, and those of bitcoin and ethereum, could enhance market transparency and reduce concentrated risk exposure to the “trusted third parties” that would traditionally handle such transactions.
However, the council also noted that there were “risks and uncertainties” involved, such as inexperience with such systems, the possibility of operational vulnerabilities that no-one has found yet, and the possibility of fraud if enough participants in the system collude with one another.
