The co-founder of Future of Finance, Dominic Hobson, hosted a discussion on the revolution introduced by digital payment, with Ripple representative, Marjan Delattine, Industry Solution Advisor at FNality International, Olaf Ransome and Head of Swift at North America, David Watson.
Marjan, talking about how Ripple Labs Inc. brought a revolution to the payment industry, said Ripple is changing the nostro vostro relationship.
Dominic said to David that Ripple argues that Swift remittance process requires stagnant unlocking of money in various Nostro accounts, he then questioned whether Swift will or is using blockchain technology.
Swift is Using Blockchain Technology
David Watson said a lot of Swift customers settle transactions using the nostro vostro model and Swift does not dictate that to them. He said the financial institutions using Swift network chose to use it to offer users various mechanisms for settlement.
As regards Swift moving into the use of blockchain, David said that lies around whether Swift is looking at other ways to allow banks facilitate different settlement model. He claimed that Swift is certainly looking for such and it has always been. Weather Swift will use blockchain technology, David averred that no doubt, blockchain is a technology that can help proffer solutions to some of the problems encountered by Swift, hence swift is observing blockchain.
He said Swift uses blockchain in certain places. However, he explained that there are other places where blockchain offers a solution to problems that other technologies also do.
Daivid said Swift is certainly searching for how to facilitate various types of settlement models “and be more agnostic rather than the traditional nostro vostro liquidity management mechanism”
Ripple Changing Nostro Vostro Relationship
The Head of Global Banking at Ripple, Marjan Delattine was asked if Ripple depends on money being locked in Nostro accounts. She replied no, saying the way banks work by depending on Nostro account causes trapping of lots of capital.
She said sourcing on-demand liquidity is the only solution to this as it helps move funds without keeping liquidity in the destination. She said this is what Ripple is working on.
She observed that Ripple offers a live product that uses multiple corridors, and stated further that this is achieved by using Ripple’s native asset XRP as a bridge currency between two fiat currency, revolutionizing the archaic means of pre-funding accounts that still happens today.
Marjan said Ripple has and it is extending the service to more corridors that are immensely faced with the challenges of moving funds, citing the Philippines. She however added that Ripple is also planning to move the services to Brazil.
The Ripple representative who earlier worked at Swift as Business Director of Swift Gpi and as the company’s Head of Business Development said Ripple has a big agenda and roadmap promoting financial institutions access to on-demand liquidity.
Do not forget that aside Philippines, Ripple On-Demand Liquidity service is being used in Australia and Mexico.
Role of Digital Payment in Sustainable Development Goal
Blockchain expert advisory board member, Olaf Ransome, who is an official of Fnality, explained the role digital payment can play in sustainable development goal. Olaf said if cross-border payment is made easy and if the way money is redistributed to some economy is improved, there will be ease and reduction in the cost of sending money from country to country.
He explained that the idea will become helpful to people and allow them to make payment easily. Citing the example of people working in Middle-East, Olaf said it is expensive and time taking for people to send money home. He furthered that Facebook also mentioned the problem of high cost and slow remittance process at the launch of his Libra project.
He said digital payment can make us have more inclusivity through the use of technology and this will stop the overcharging.
