A post by Word Bank has reflected that the introduction of distributed ledger technologies (DLT) by Ripple and the zero-fee remittance innovation introduced by Circle Pay have forced remittance incumbents like SWIFT, Visa and JP Morgan to innovate.
The financial regulator in a post posited that the traditional B2B cross-border payments tend to be slow and opaque and hamper business and cost structure across the globe, saying some see DLT as the best option to “drive industry-wide change.
The post reflects that xRapid, a DLT-based cross-border payments solution surviving on digital asset XRP, functions in the U.S.-Mexico corridor, a competitive payment corridor, saving financial firms “40%-70% in foreign exchange costs” with the average time reduced to two minutes. In the same line, the post points that fund transfer on xRapid take two to three seconds.
It added that Circle also make use of blockchain to achieve p2p almost instant money transfers, with Circle Pay servicing nothing less than 29 countries.
Afterward, the post maintains that owing to the above, “industry incumbents are also being pushed to innovate” in order “to reduce cost and better serve market needs”.
This pushed SWIFT to start exploring DLT to solve Nostro account reconciliation issues and also launch Global Payments Innovation (GPI).
The Word Bank post states that Visa’s B2B Connect is also exploring a DLT solution for B2B cross-border payments.
In the same line, the post states that [bctt tweet=”JP Morgan is making use of a DLT application that offers messaging, validation and foreign exchange pricing services enable them serve customers better.” username=”Todays_Gazette”]
The development of JPM Coin is also part of the necessary innovation forced on JP Morgan by the likes of Ripple and Circle.