The Bill & Melinda Gates Foundation has tapped Ripple’s Interledger Protocol (ILP) to help level the economic playing field for the 2 billion people who are trapped in poverty, many of whom solely because they do not have access to a bank account or other basic financial services.
On Monday, the Gates Foundation released Mojaloop, software intended to provide the world’s unbanked population with access to digital financial services. The software is open-source, so banks will be able to adapt and implement it into their digital platforms with reduced effort and cost. The project was funded by the Gates Foundation and developed by a group of fintech companies, including Ripple.
Mojaloop uses Ripple’s ILP technology to create an interoperability layer that connects bank accounts, mobile wallets, and merchants in a single loop. According to Ripple, this will enable market participants to conduct digital transactions as “freely and fluidly” as cash, which will help not only individuals but also the wider local and national economies.
Kosta Peric, Gates Foundation deputy director of financial services for the poor, explained in a statement that interoperability has been one of the primary obstacles preventing the poor from using digital wallets to access basic financial services:
“Interoperability of digital payments has been the toughest hurdle for the financial services industry to overcome. With Mojaloop, our technology partners have finally achieved a solution that can apply to any service, and we invite banks and the payments industry to explore and test this tool.”
In an announcement posted on the startup’s blog, Ripple Chief Technology Officer Stefan Thomas added that Mojaloop has the potential to introduce millions of people into the digital economy:
“Enabling the poor to make payments to anyone, anywhere, using a mobile wallet has implications beyond increased access to their domestic economies. It has the potential to bring millions into the fold of the global digital economy. We are honored to have been a part of this project.”
Unlike the announcement from fellow fintech startup Stellar, this project does not initially appear to rely on the firm’s native cryptocurrency. Consequently, it is unlikely to have a noticeable effect on the price of XRP. In fact, the ripple price has declined to a present value of $0.256 after briefly climbing to $0.291 Monday morning ahead of the opening of “Swell”, a Toronto fintech conference hosted by Ripple.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:11 AM