On May 18, 2020, Ripple (XRP) tech transforming remittance markets attracts interest from the US Consumer Financial Protection Bureau (CFPB), a government agency responsible for consumer protection in the financial sector.
In a publication titled “Remittance Transfers under the Electronic Fund Transfer Act (Regulation E)”, the agency stated that it has been monitoring the market for remittance transfers for quite some time, including the growth of digital asset companies like Ripple.
The CFPB report identified major trends in the market for remittances, such as the tenacious growth and increasing functionality of the “global payments innovation product” of the Society for Worldwide Interbank Financial Telecommunication (SWIFT).
According to the CFPB, this will provide sending institutions with more advanced information for cross-border credit transfers. At the same time, SWIFT aims to expand the capacity to support these payments.
Moreover, the CFPB has also observed the continued growth of fintech companies that are not banks and are expanding their reach through new partnerships and relationships with banks.
Formed in 2011, the CFPB is tasked with protecting consumers from deceptive market practices.
Ripple’s Tech Can Transform Cross-border Payments
In its report, the CFPB explicitly mentions the continued growth and expanding partnerships of virtual currency companies. Cryptos such as Ripple offer both a payment messaging platform to support cross-border money transfers and virtual currency, XRP, which can be used to settle those transfers.
As the CFPB states, the new technologies offer ways to make cross-border payments both predictable in terms of charges and cheaper.
“Ripple’s suite of products could similarly allow banks and credit unions to know the exact final amount that recipients of remittance transfers will receive before they are sent,” the report continues.
At the same time, the Authority notes that this could lead to greater standardization and facilitation, allowing institutions to know the precise exchange rates and third party charges that are applied.
This seemingly caught the attention of the management at Ripple, prompting Stuart Alderoty, general counsel at Ripple, to tweet the mention. He concurred with the CFPB, saying that the agency’s assessment of the predictability of fees for Ripple’s services was spot on.
Ripple’s Remittance Program Mentioned in Recent US Bill Proposal
Ripple has been making waves in the cross-border remittances market, with a recent proposed bill on remittance insurances mentioning XRP as the newest developments in payment channels.
The document published on Dec.13, 2019, proposed securing funds sent through the growing selection of payment channels, and covered the activity of fintech startups and payment processors.
Increased cross-border remittances have alerted US regulators to the opportunities for tracking and securing funds.
