Asia may be the next proving ground for the crypto-currency company Ripple to arrive with its cross-border payment broker.
In a June 18 interview on the Thinking Crypto YouTube channel, Adam Traidman, CEO of SBI Ripple Asia, a subsidiary of Japanese financial services giant SBI Holdings, said Ripple has begun deploying its On Demand Liquidity (ODL) solution in Asia.
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According to Traidman, SBI Ripple Asia has initiated „limited pilot and test projects“ with several companies for the Ripple payment corridor, and sees further expansion planned for 2021.
„I hope that by the end of this year, and next year, things will move towards wider production,“ Traidman said. „I hope that the remittance companies that had restricted growth because they have pre-financing requirements will have a lot of capital, that they will have a lot more flexibility.
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Cheaper and faster
The ODL solution from Ripple, a payment broker that uses Ripple’s native token, XRP, as a bridge currency, can effectively reduce the cost and delivery time of cross-border transfers, which often take more than one business day to clear. According to Traidman, this eliminates the possibility of currency fluctuations and pre-funding requirements for transfers.
However, he says it is not the best solution for all countries:
„In Japan, sending money is very expensive. In the U.S., it’s not so expensive. That’s why I don’t know if Ripple will replace the ACH [Automated Clearing House] in the US at the moment. The [ODL] technology is much better suited for cross-border payments where the costs are much higher […] Ripple’s technology is great in Asia and very successful in South America.
The ODL network is increasing its use. The Ripple ODL payments network tripled its transaction volume in the first quarter of 2020, while the USD value of ODL transactions increased by more than 294%.
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Cointelegraph has reported that many countries in Asia are already using the Immediate Edge blockchain-based financial services network for cross-border payments, including South Korea and Bangladesh.
However, other remittance services, such as London-based Azimo, have also been using ODL in Asian countries. The company has been working on a payment corridor between Europe and the Philippines.
„Asia is proving to be much more progressive in terms of all kinds of payment channels,“ Traidman said.