UBS, Santander and CIBC are among seven banks to sign up to the Ripple's distributed ledger technology for cross-border payments.
By embracing Ripple, the group - which also includes UniCredit, ReiseBank, National Bank of Abu Dhabi and ATB Financial - are hoping to slash the time and cost of cross-border settlement and enable new types of high volume, low value global transactions
For transactions, Ripple lets banks ditch the traditional, sluggish model of using local currency accounts with correspondent banks. Instead, money is converted into the native Ripple currency, XRP, and sent in near real-time.
The seven are all planning to deploy Ripple commercially, with most having already moved real money via the network. Last week ATB Financial and ReiseBank gave a demonstration of a $1000 transfer during the Payments Panorama conference.
"Using blockchain technology, ATB Financial became the first financial institution in Canada to complete an overseas payment in a matter of seconds. Without blockchain, that transaction would have taken two to six business days," says Curtis Stange, chief strategy and operations officer, ATB.
In May Santander confirmed that it has begun piloting a Ripple-powered mobile app that is available to employees within a staff pilot. The app allows cross-border payments between £10 and £10,000 to be made at any time of the day, with the funds appearing in the recipient’s account the next working day. Santander intends to expand the technology at a later date.
The new deals means that Ripple’s network now includes 12 of the top 50 global banks, with 10 banks in commercial deal phases, and over 30 pilots completed.
Chris Larsen, CEO, Ripple, says: "We’ve reached a tipping point where financial institutions are moving beyond blockchain experimentation and projects to real world applications that are driving significant bank-to-bank volume."
Paolo Cederle, CEO, UniCredit Business Integrated Solutions, adds: "Blockchain and related technologies are a paradigm shift from the status quo and increasingly a major focus of innovation for us. That’s why we’re committed to moving beyond the lab and testing environments."