NAIROBI (CoinChapter.com)— XRP’s role in global banking has drawn mixed reactions, especially regarding its use for cross-border settlements. While Ripple’s technology has gained attention from financial institutions, questions remain about whether banks truly use Ripple’s token for settlement.
Major companies adopt altcoins like Solana and Ripple. Source: X
A post by @gdustonX highlighted the increasing adoption of altcoins like XRP and Solana by institutions such as Bank of America and JP Morgan. However, while Ripple is expanding its global reach, XRP’s direct role in bank settlements is not fully confirmed.
Banks Exploring Ripple’s Technology, Not Necessarily XRP
Ripple has partnered with over 100 financial institutions globally through its RippleNet platform. Major players like Santander (U.S.), Canadian Imperial Bank of Commerce (Canada), and SBI Remit (Japan) are onboard. Other notable banks include Itaú Unibanco (Brazil), SEB (Sweden), and Kotak Mahindra Bank (India).
While these banks use Ripple’s technology for faster cross-border payments, there is no clear indication that they are using XRP for settlements. RippleNet primarily provides a more efficient infrastructure for international transactions without necessarily relying on Ripple’s token.
Deutsche Bank has teamed up with Ripple-backed Keyrock to improve multi-currency accounts and foreign exchange (FX) services. While the partnership focuses on Ripple’s technology, the use of its token in settlements remains less clear.
Mastercard’s CEO declares Ripple could replace SWIFT. Source: CryptoGreek/X
Mastercard has also partnered with Ripple to explore integrating XRP into the SWIFT system. The goal is to streamline multinational transactions and improve the efficiency of money transfers. Despite these partnerships, most institutions are leveraging Ripple’s blockchain platform rather than directly using XRP for settlements.
Japan’s Central Bank is set to fully integrate Ripple’s token into its payment system by 2025, allowing customers to use it for transactions.
XRP’s Role in Cross-Border Payments and Liquidity
The World Bank has acknowledged XRP for its efficiency in cross-border payments, citing its speed and low transaction costs. XRP has shown potential in facilitating international money transfers, though it remains to be seen how it will fit into global payment systems.
World Bank selects XRP for cross-border payments. Source: Levi/X
A notable example of XRP’s potential is Arrington Capital’s transfer of $50 million using XRP, completed in just 3 seconds at a cost of only $0.3.
Ripple has broadened its offerings beyond its payment network by launching a digital custody service tailored for banks and fintech companies. Introduced on October 10, this new service enhances Ripple’s ability to assist these institutions in securely storing and managing digital assets.
Ripple introduces crypto custody services for banks. Credit: X
Some institutions, like those in the BRICS alliance, seek alternatives to the traditional SWIFT network. XRP’s technology provides a way for banks to avoid liquidity issues and reduce transaction costs.
Adoption Still in Question
While XRP is positioned as a leading digital asset for cross-border payments, its direct use in settlement by banks remains limited. Institutions like Deutsche Bank and Mastercard are using Ripple’s blockchain but have yet to widely adopt XRP as a primary settlement tool. Banks in Japan plan to integrate XRP into their systems, but other major financial entities are proceeding cautiously.
For now, Ripple’s blockchain is gaining traction. Whether XRP will become a widespread tool for bank settlements remains to be seen. As regulatory frameworks evolve, the future of XRP in the banking sector may become clearer.
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