Ripple’s global head of infrastructure innovation Dilip Rao said that unlike Bitcoin and cryptocurrencies, XRP — the digital currency created by Ripple — is designed to enable remittance of fiat currency and not to replace it. Besides using XRP for remittance, The company also offers its platform Ripple Network to lenders for facilitating cross-border remittances — rivalling the SWIFT network that has been conventionally used by banks.
Ripple has tied up with private lenders Yes Bank, Axis Bank and IndusInd for using the blockchain-based platform for payments without the use of the cryptocurrency asset. It, however, maintains that it aims to use XRP in future as a ‘connecting cryptocurrency’ to facilitate remittance.
Last year, Ripple had also set up an office in Mumbai and appointed former Citibanker Navin Gupta as country manager. “There is a great regulatory comfort with Ripple Net — particularly in the light of the Bank for International Settlements’ policy requiring central banks to have a backup for payment systems having non-similar technology,” said Rao. He added that this was crucial as payment systems were systemically important and a cyber-attack to systems would be akin to infection of the core. In India, while the RBI has barred banks from servicing companies dealing in cryptocurrencies, it has also set up a panel to look into the possibility of a central bank digital currency.
“Even from a geopolitical point of view, countries are having concerns over the existing cross-border payment systems, which can be switched off with a turn of the switch,” said Rao. In addition to pitching Ripple for cross-border payments, the company is offering its own platform as an alternative to Real Time Gross Settlement (RTGS) system for countries that do not have a developed interbank network.