Many companies have emerged over the past decade, leveraging crypto and blockchain tech, to revolutionize the traditional banking system. However, Blockchain payments company Ripple has been one of the leaders in the fintech scene for years now.
Banks and other financial institutions have realized the potential of Ripple’s blockchain-based solutions for fintech hence many financial institutions have started to decentralize their processes. Its On-Demand Liquidity (ODL) product leverages its native currency XRP to act as a bridge between two different currencies, eliminating the need for any kind of pre-funding.
Lately, Ripple has been focusing its efforts towards strengthening its presence in Asia, and according to Adam Traidman, CEO of SBI Ripple Asia, the company has been conducting trial and pilot projects in Asia for Ripple’s On-Demand Liquidity, and it could be the next proving ground for the crypto firm.
As per Traidman’s interview on the Thinking Crypto YouTube channel, SBI Ripple Asia – a subsidiary of Japanese financial services giant SBI holdings – the company has already started deploying its ODL solution in Asia.
Traidman stated that SBI Ripple Asia has started “limited trial and pilot projects” with various companies for Ripple’s payment corridor, with greater expansion forecast expected by 2021. He added:
“I expect that probably later this year, and into next year, things are going to move into wider spread production. I expect remittance companies that were restricted in growth because they have pre-funding requirements, they have a lot of capital—they’re going to have a lot more flexibility.”
ODL has been proven to be quite effective in reducing costs and delivery time for cross-border remittance. The tech has been implemented by traditional remittance giants like MoneyGram. The company announced that it has been moving 10% of its total transaction volume between the United States and Mexico using Ripple’s ODL.
According to Traidman ODL can be an improvement over the traditional system, but it isn’t the best solution for every nation.
“In Japan, sending money is very expensive. In the U.S., it’s not as expensive. That’s why you don’t see Ripple replacing ACH [Automated Clearing House] in the U.S. right now. The [ODL] technology is much more suited for cross-border payments where the costs are a lot higher [..] Ripple’s tech is great in Asia and very successful in South America.”
Making good progress
ODL saw massive growth throughout the last quarter of 2019. The platform handled 550% more value in Q4 of 2019 than it did in the previous quarter. Furthermore, it tripled its transaction volume over Q1 2020, while the USD value transacted using ODL increased by more than 294%.
As previously reported by The Daily Chain, there have been reports of SBI holdings planning to integrate Ripple’s settlement platform MoneyTap with ATMs run by various banks throughout Japan.
The company has also partnered with remittance platform Azimo, to leverage its On-Demand Liquidity solution (ODL), to provide faster remittance services in the Philippines, using Azimo’s platform. On this matter, Traidman said:
“Asia happens to be a lot more progressive when it comes to all sorts of payment rails.”