Tapping blockchain technology, London-based multinational banking and financial institution Standard Chartered has announced the completion of its first cross-border real-time payment.
Standard Chartered is the latest bank to successfully implement a blockchain solution for the payments.
As with many banks pulling off the feat for business transactions, Standard Chartered used Fintech startup Ripple’s enterprise blockchain platform. In this endeavor, the pilot saw a transaction ping over to an unnamed “major correspondent bank” to see the transaction complete in less than 10 seconds. This settlement time included the “full transparency of fees and FX (foreign exchange)”, an announcement revealed. The same payment dispatched through the existing banking system and network would take up to two days, the bank remarked.
In a statement, Alex Manson, global head of Transaction Banking at Standard Chartered said:
Payments innovation is a key area of focus in order to bank our clients’ ecosystem and make it more cohesive, reduce risk and increase transparency.
Indeed, the payments industry – a critical component making up the foundation of the existing banking system – is currently under the threat of disruption from bitcoin’s underlying technology, the blockchain. Newly released IBM research has revealed that banks are rushing to implement blockchain solutions, as early as 2017.
Standard Chartered is understandably encouraged by the pilot of a technology that can reduce inefficiencies and costs while providing benefits to its customers.
The bank adds that blockchain implementation when fully commercialized, will see business have the means to access and make real-time, cross-border payments without cut-off times. Fees and foreign exchange rates will be made more transparent, enabling users with greater control over their payments and funds.
The new announcement is a part of the bank’s wider “Banking the ecosystem” rollout. The initiative aims to bridge business communities to increase financial trade and investments, focusing on Asia, Africa and the Middle East. It is, therefore likely, that the bank’s cross-border business payment involved a real-time transfer between entities’ banks in the eastern hemisphere.
Furthermore, the bank’s Ripple-blockchain pilot comes within a fortnight of its “strategic investment” in the Fintech startup. While details of the investment are currently unknown, the bank will take an “observer board seat” at Ripple.
In similar news, The National Australia Bank (NAB) – one of Australia’s “Big 4” banks – recently concluded its own proof-of-concept payment from one bank employee’s account in Australia, to another’s in Canada. The real-time transfer also leveraged Ripple’s distributed ledger and, similarly, took 10 seconds to complete.
Featured image from Shutterstock.
Last modified: July 2, 2020 8:20 PM UTC