Cryptocurrency player Ripple keen to set off blockchain waves

The cryptocurrency firm Ripple is already an established presence in Singapore and is keen to finds ways to develop the use its blockchain technology.

Ripple's CEO Brad Garlinghouse said the company, which set up an office in Singapore last September, is among the firms that have held early talks to be part of the Monetary Authority of Singapore's experiment in cross-border payments using blockchain technology.

Ripple offers blockchain technology to banks looking to speed up cross-border payments from days to seconds. Banks had long been unable to efficiently track cross-border payments while their fees were typically passed on to both corporate and retail customers.

It was only last year that Swift - the dominant payment network service used by global banks - went live with a service that lets banks speed up and more efficiently track cross-border payments to one another.

But Ripple's technology is already gaining traction: Last year, Swedish bank SEB processed more than US$180 million (S$240 million) in payments for a large corporate client between Sweden and the United States using its technology.

Standard Chartered and India's Axis Bank in November launched a real-time cross-border service that uses Ripple technology to send Singdollar corporate payments from clients in Singapore to accounts in Axis Bank. This lets the banks track any delays of payments.

They are not using Ripple's cryptocurrency XRP, but the firm says it could be a means of settlement when a bank wants to move money into a country but does not have a local-currency account at a local bank there.

Mr Garlinghouse said a bank could sell greenbacks into XRP in seconds and then quickly convert XRP into another currency such as Singdollars.

Despite it being early days for XRP's mainstream use, the cryptocurrency was the best performer of the lot last year, gaining more 300-fold. It surged late in 2017 after three Japanese credit card firms said they would use Ripple's technology.

A group of Japanese and South Korean banks are also experimenting in using the technology to remit funds between the two countries.

The buying fever for XRP is also being driven by the fact that people no longer see bitcoin as the panacea for all transaction problems, said Mr Garlinghouse.

He noted that bitcoin's transaction time is an average of four hours, while costs remain high: "(It) can be as much as $5 per transaction. If you used bitcoin to buy a coffee, the transaction would double the price."

XRP, said Mr Garlinghouse, can do over 1,500 transactions per second at "a fraction of a penny".

Ripple started in 2012 and has attracted investments from StanChart, Santander in Spain and Thailand's Siam Commercial Bank.

It has around 10 of the world's top banks as clients, and plans to double its 100-strong network by the end of this year, said Mr Garlinghouse, adding that Ripple should appeal to banks fretting over Big Tech rivals.

"If you are a traditional bank, and Alipay is entering your market - or it could be Google, Facebook, WeChat - you can compete... with digital-first technology. That gives you a fair fight," said Mr Garlinghouse.

"If Google or Amazon launches some of these services, it's not going to take them three days to settle between the US dollar and the Singapore dollar."

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A version of this article appeared in the print edition of The Straits Times on January 11, 2018, with the headline Cryptocurrency player Ripple keen to set off blockchain waves. Subscribe