SBI Holdings, a Japanese company with major banking subsidiaries including SBI Securities, SBI FXTRADE, and SBI Virtual Currencies, has received the green light from Japanese regulatory authorities to move forward with their partnership with US-based Ripple in order to launch a new joint venture called SBI Ripple Asia.
The newly approved venture has been in the works since 2017, when SBI and Ripple first began talks to launch Ripple-based products, including the soon to launch MoneyTap app. Japanese regulators have granted the two companies permission to process, handle, and transmit digital payments as an official “Electronic Settlement Agency Service Provider.”
The approval comes as Japan has tightened regulations on fintech and electronic payment technology companies, introducing new legislation that requires companies looking to introduce electronic payment technologies (like MoneyTap) to gain approval from the FSA before publicly launching these products.
The joint venture by SBI and Ripple will allow users to send rapid peer-to-peer payments using Ripple’s Distributed Ledger Technology to facilitate the payments.
SBI announced the regulatory approval on their site, with a rough translation from Japanese reading:
“SBI Ripple Asia Co., Ltd. today completed registration as a substitute agent for electronic settlement… SBI Ripple Asia is a remittance application for smartphones (Money Tap), which connects to the next generation financial infrastructure utilizing the Distributed Ledger Technology (DLT) at the ‘Internal and external exchange centralized consortium’ to create an environment that allows depositors to remit money between individuals quickly, safely and comfortably. In order to reduce the development burden of financial institutions participating in this consortium, we have made it possible to make connections using open APIs.”
How Increased Ripple Partnerships Could Affect XRP
MoneyTap is one of the results of the relationship between SBI and Ripple and is coming as investors are becoming increasingly keen on finding use-cases for XRP, the cryptocurrency largely intertwined with Ripple Labs.
Recently, XRP has seen a meteoric price rise as compared to the rest of the cryptocurrency markets, mainly due to the expanding list of XRP use-cases, including Ripple’s upcoming xRapid product, which will likely increase the liquidity and trading volume of XRP if widely utilized by the companies that are currently trialing it.
In addition to xRapid, another upcoming product by blockchain startup Coil, utilizes XRP in order to facilitate micro-payments for internet content including articles, videos, music, and more.
If widely adopted, Coil and xRapid could prove to investors that XRP is practical for facilitating both large and tiny transactions, which could significantly increase investor confidence in the cryptocurrency that is currently criticized for being a “bankers coin” that doesn’t offer anything that isn’t offered by Bitcoin or other crypto competitors.
The news surrounding XRP has led it to temporarily surpass Ethereum’s market cap on a few separate occasions over the past couple weeks. It is currently ranked number three by market cap globally.
Featured image from Shutterstock