Over the past year, SBI Ripple Asia has brought in 61 Japanese banks to its consortium representing 80 percent of Japan’s total assets. In the upcoming months, the consortium could begin to utilize the Ripple network to process cross-border payments.
On September 26, SBI Ripple Asia successfully registered with the Kantou Bureau of Japan’s Ministry of Finance as a licensed electronic payments agent. The license allows the organization to operate as a money transmitter, processing and clearing transactions on behalf of individuals and businesses.
Initially, the organization Asia will test out its MoneyTap payments app, a blockchain-based money transfer service for retail users, but the licence is expected to lead to an increased adoption of Ripple.
Increasing Demand in Japan
Last week, the price of XRP, the native cryptocurrency of Ripple, increased by nearly three-fold. Around the same time, the volume of XRP-to-yen and XRP-to-crypto trading pairs surged in the Japanese cryptocurrency exchange market, fueling the rally of XRP.
Analysts attributed the abrupt increase in the price of XRP to the increase in demand for the asset from the Japanese cryptocurrency exchange market, which remains as the largest crypto market ahead of the US and South Korea.
It is entirely possible that growing anticipation towards the integration of Ripple by the 61 banks involved in the consortium and two of the biggest commercial banks in South Korea Woori Bank and Shinhan Bank is contributing to the newly found momentum of XRP.
Based on local regulations, businesses that intend to work with banks and their APIs to process payments are required to be licensed as a electronic payments agent and register with local financial bureaus.
The recent move of SBI Ripple Asia frees the institution from holding back the integration of various blockchain-based products such as xRapid and xCurrent into the existing infrastructure of major banks.
Already, in March of this year, Woori Bank and Shinhan Bank conducted a pilot test of Ripple’s liquidity products to process cross-border payments between banks in the SBI Ripple Asia consortium.
In December 2017, the Ripple team wrote:
“The Japan Bank Consortium will use Ripple’s settlement technology, xCurrent, to settle transactions between participating Japanese banks and Woori Bank or Shinhan Bank. The pilot solidifies the Japan Bank Consortium’s commitment to modernize payment systems — specifically in the Japan/Korea corridor where Korea is Japan’s third largest trade partner — to send money instantly, removing the need for intermediaries while reducing the cost of sending global payments.”
Earlier this year, Woori Bank hinted full integration of XRP by the end of 2018, if it is ready to be implemented onto the bank’s services for international payments. The status of SBI Ripple as a licensed payments agent increases the probability of large commercial banks in Asia collaborating more actively with the organization to speed up the integration of XRP.
Dozens of Banks Will Use XRP
At the Money 20/20 conference, Ripple CEO Garlinghouse explained that dozens of major banks will utilize the Ripple network to process payments.
“I’ve publicly stated that by the end of this year I have every confidence that major banks will use XRapid as a liquidity tool. You know, by the end of next year, I would certainly hope that we would see you know in the order of… dozens,” Garlinghouse said.
The Japanese and South Korean finance markets are closest to adopting XRP and its liquidity products.
Featured image from Shutterstock.
Last modified: March 4, 2021 3:44 PM