Bank Of England Test Ripple (XRP) for cross border payments!

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Central banks around the world are slowly starting to recognise the potential of cryptocurrencies. Some feel threatened and are doing everything in their power to negate the threat, but some like the Bank Of England, are embracing the change and experimenting with the possibilities. ​ Being one of the few digital currencies to maintain a level of central control, Ripple (XRP) is an attractive option for large corporate institutions and companies alike looking to improve the efficiency of international payments.

Currently, the main method banks use to send cross border payments (SWIFT), takes on average 3 days to appear in the recipients bank account. Usually it takes 1-2 days for the transaction to complete, but the banks actually use YOUR money to earn some float on it and keep for profit. Despite this fact, they stiill have the audacity to charge £20 for the privalidge.

Now 50 years ago before the internet, when international communications genuinely took time and effort to complete, I can understand the need. However it’s now 2017 and technology has boomed, messages can now be sent worldwide in a matter of seconds, and international payments are about to follow suite.

With Ripple, international payments can be sent in literally seconds, with no need for any human interaction. Everything is done automatically in the block chain using the most scale-able digital asset available.

While most digital currencies are marketed toward consumers, investors and tech enthusiasts, Ripple was designed and marketed intentionally of enterprise use! Businesses, banks and organisations looking to make cross border payments more efficient, cheaper and faster!

The Bank Of England used Ripple’s interledger protocol to test the proof of concept after announcing plans to introduce new functionality to support the ‘synchronisation’ of cash movements.

‘ This PoC was a useful exercise to develop the Bank’s understanding of synchronisation and possible technical solutions. Our key learning points were:

That the Interledger Protocol was able to support synchronisation of payments between two simulated RTGS ledgers; That the ILP Validator created a single source of truth between the two ledgers, eliminating the need for separate processes such as mutual reconciliation between separate ledgers; Cross-border payments when applied to wholesale markets present different challenges than when compared with retail and corporate transactions, which the Ripple product is designed to handle. The availability of liquidity is one such challenge, and the PoC allowed the Bank and Ripple to begin exploring these questions.

The Bank is considering further Proofs of Concepts to extend its understanding of the dimensions of the synchronisation concept. ‘

It’s only a matter of time before more banks begin taking note and jumping on board, but in the meantime it’s an exciting time and Ripple is looking a good altcoin to watch in the future.

Read the Bank Of England’s Report here Learn more about Ripple (XRP) here