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Distributed ledger technologies currently have all the features needed to ease the cross-border remittance industry, making it a topic of discussion for institutions around the world whether or not it works. l & # 39; future. A recent blog post published by the World Bank also addressed the same theme: how do Ripple Circle and JP Morgan use DLT for cross-border payments?
Questions from the World Bank: "Is the future of cross-border payments distributed?"
Rodrigo Mejia-Ricart, a research and public policy badyst for the Better Than Cash Alliance, a partnership of more than 60 governments, corporations, and international organizations based at the UN, recently published a blog for the World Bank that explained how technology from distributed ledger brought the world closer by easing the suffering of the traditional global remittances sector – making it fast, easy and less expensive.
Remittances are a vital economic resource in emerging economies as they help vulnerable populations cope with adverse economic conditions. The size of the industry is huge and reached $ 613 billion in 2017 and is expected to have grown by 4.6% in 2018 to a record $ 642 billion. Put in perspective, remittances worldwide represent four times more than the total of the world's official development badistance, which stood at 158 billion dollars in 2016. For emerging economies, the figures on personal remittances are quite large, for example, it represents 10.5% of GDP in the Philippines, 13.7% in Senegal, 28.3% in Nepal and 29.3% in Haiti.
One article explained that cross-border payment innovations can reduce the operational costs of remittance services and explain how Ripple, Circle, JP Morgan and Swift also use DLT. We quote in the report how each of the actors had a positive impact on the sector.
- Ripple: Ripple's xRapid has saved up to 40% -70% of the foreign exchange costs of the financial institutions involved in the pilot project. The average payment terms were slightly over two minutes. The transfer of funds on xRapid took from two to three seconds, most of the processing time being explained by the national payment rails and the intermediate digital badet exchanges.
- Circle: The Circle's Circle Pay service is currently available in 29 countries and allows seamless transfers between the US dollar, the pound sterling and the euro. Their website states that they charge no fees and no exchange rate markup.
- QUICK: SWIFT has implemented the Global Payments Innovation (GPI) technology, which aims to significantly modernize cross-border B2B payments by making them faster and more transparent.
- VISA: Visa's B2B Connect tests a DLT solution for cross-border B2B payments.
- JP Morgan: JP Morgan is testing a DLT application that provides messaging, currency validation and pricing services to improve the customer's cross-border payment experience. JP Morgan has also developed JPM Coin, a digital coin designed to make instant payouts using blockchain technology.
The blog concludes that cross-border payments based on DLT are potentially a promising way to dramatically improve the lives of millions of people in emerging economies. This technology has the potential to improve traceability of remittances and reduce compliance costs for MTOs and payments in the supply chain, thereby boosting the economic activity of destination countries.
Will DLT be the future of cross-border payments? Let us know your point of view on the same thing.
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Ripple, Circle and JP Morgan all use DLT technology for cross-border payments: World Bank
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Distributed ledger technologies currently have all the features needed to ease the cross-border remittance industry, making it a topic of discussion for institutions around the world whether or not it works. l & # 39; future. A recent blog post published by the World Bank also addressed the same theme: how do Ripple Circle and JP Morgan use DLT for cross-border payments?
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Nilesh Maurya
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Coingape
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