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Blockchain settlement startup, Ripple, has added PNC Financial Services Group to their list of clients utilizing their real-time cross border settlement systems in order to more efficiently process international payments.
PNC will be using Ripple’s xCurrent system, which utilizes blockchain technology in order to quickly and cheaply process international payments. This system, however, does not utilize cryptocurrency, unlike Ripple’s xRapid system, which uses XRP to settle international payments.
PNC’s move to utilize blockchain technology to process international transfers comes amidst a widespread movement for banks and financial institutions to switch to blockchain in order to stay competitive, and to transition away from the inefficiencies that are inherent with the current settlement systems.
Ripple Facing Growing Competition as More Banks Turn to Blockchain
Although Ripple is currently the go-to company for blockchain-based settlement systems, they are facing growing competition from major corporations, including IBM, who recently unveiled their World Wire cross-border payment solution.
The new IBM product is very similar to Ripple’s, although their solutions are working off of the Stellar blockchain, which is very similar to XRP’s blockchain. Unlike Ripple, however, IBM’s product requires that financial institutions utilize cryptocurrencies of their choice to conduct the transfers, and they do not currently offer a system to compete with Ripple’s xCurrent, which is solely based on the blockchain and not on cryptocurrency.
IBM describes the use of cryptocurrencies in their new system, saying:
“Two financial institutions transacting together agree to use a stable coin, central bank digital currency or other digital asset as the bridge asset between any two fiat currencies. The digital asset facilitates the trade and supplies important settlement instructions…World Wire then simultaneously converts the digital asset into the second fiat currency, completing the transaction. All transaction details are recorded onto an immutable blockchain for clearing.”
Ripple’s xRapid Nearing Launch
Although the majority of Ripple’s clients are currently signed on to use, or in trials with, xCurrent, the company is launching its xRapid product in the coming months and is hoping to eventually move their xCurrent clients to xRapid.
Ripple’s senior vice president for product management, Asheesh Birla, spoke about the use of xRapid, saying that “Banks aren’t going to be the first adopters of xRapid,” and further adding that xCurrent is “a way to get their toe into the water.”
Ripple has already signed on multiple major companies and institutions to trial with xRapid, including Santander Bank, Money Gram, Western Union, and SBI Japan, but it is unclear how many of these corporations will use the product after its official launch in the coming months.
According to Ripple’s head of regulatory relations for Asia-Pacific and the Middle East, the company has already signed on more than 120 banks and financial institutions to use their xCurrent system. It is unclear how the growing competition will affect the number of clients Ripple gains.
Featured image from Shutterstock.
