Ripple is bidding to work with international banks to rewire the international money transfer business through the fast and frictionless exchange of its digital currency tokens in exchange for fiat currency, effectively upending traditional banking payments channels by creating a fiction-free standard for instantaneous funds transfers.

The company is currently working behind closed doors with a number of Tier 1 banks - including Royal Bank of Scotland and Commonwealth Bank of Australia - to investigate potential applications of its permissioned ledger for international funds transfers. It is also involved in the R3-led initiative to create a set of global standards for the use of distributed ledger technology in financial markets, which has won the backing of 22 major banks.

Ripple recently closed a $28 million funding round that included investment from the venture arms of CME Group and global data storage company Seagate Technology. For the latter, the protocol will be adopted by its treasury arm for conducting instantaneous international money transfers.

The $100 million Santander InnoVentures fund is an investment vehicle designed to partner with portfolio companies and explore new technologies that can be used in support of the giant Spanish bank's customer base. The fund has so far pumped money into Swedish mPOS vendor iZettle, open source Android operating system outfit Cyanogen, and Israel-based MyCheck.

The investment in Ripple is the first the bank has made in an emerging blockchain business. It follows the publication of a Fintech 2.0 manifesto by the fund in May, in which it estimated that distributed ledger technology could reduce banks’ infrastructure costs attributable to cross-border payments, securities trading and regulatory compliance by between $15-20 billion per annum by 2022.

Mariano Belinky, managing partner of Santander InnoVentures, comments: “We believe Ripple possesses the talent, technology, and momentum to address many of these scenarios, and are actively exploring where and how best to apply Ripple technology inside the bank. Ripple and Santander share a common vision of the future of the industry, and we intend to jointly advocate it in the community."