Axis Bank, one of the leading private-sector banking institutions in India, has announced a partnership with Ripple to use distributed ledger technology for cross-border remittances.
Blockchain technology will be applied by the bank to enable affordable money transfers and to do so in real time. Cross-border money transfers in India can currently take up to five business days to complete, but distributed ledger technology can help to eliminate processing delays by simultaneously and securely updating all parties with correct information.
Deputy managing director V. Srinivasan said, “We are committed to using innovation in technology to make banking simple and convenient for our customers.”
Ripple, the company chosen to provide the currency exchange and remittance network for the bank, completes transactions based not on bitcoin or etherium cryptocurrency but on a native cryptocurrency called XRP, or ripples. Ripple tokens can be exchanged for flat currency, cryptocurrency, or other units of value including frequent flier miles or mobile minutes, and currently represent the third largest cryptocurrency measured in market capitalization.
As of next week, two new Ripple trading pairs will be offered by the Bitstamp exchange. Beginning January 17, Bitstamp will allow clients to trade USD/XRP and EUR/XRP. The new service is being offered in response to increased demand by customers of the Bitstamp exchange.
Axis bank began testing blockchain technology for cross-border remittances last October. At that time, Amit Sethi, chief information officer for the bank, said that he expected the technology to be used first by retail and corporate banking clients with customer solutions to follow.
Axis is the third bank in India to announce its intention to apply blockchain to international money transfers, following ICICI and Yes Bank. Just last week, Yes Bank announced their intention to partner with IBM and to use Hyperledger open-source code as a basis for blockchain solutions to vendors.
Brad Garlinghouse, CEO of Ripple, said that as the world’s largest remittance receiver, India represents a significant market for blockchain. “Given its status as the fastest-growing major economy in the world and the top market for remittances, India is a very important market that is ripe for payments innovation.”