Earthport’s Ripple Integration Takes the Blockchain to Banks (Aug. 18, 2015)
Global payments network Earthport has teamed up with Ripple Labs to offer real-time cross-border payments via Ripple’s blockchain-based transaction ledger protocol. Under the partnership, Earthport’s bank clients can access the Ripple Protocol—an open payments infrastructure offering real-time clearing and settlement of transactions in any currency—while still adhering to their compliance requirements, according to Earthport. The protocol is considered by many industry observers to hold great potential for real-time payments, especially in providing simplified and faster cross-border transactions compared with traditional options . However, the technology remains so new that many banks have had difficulty reconciling it with their compliance requirements. Earthport aims to bridge that gap by enabling banks to access the protocol while maintaining their current technology and compliance regimes, the company said. Its client banks are “far along into the planning stage for initial testing,” Earthport added.
Developed by San Francisco-based Ripple Labs, the Ripple protocol already is being tested by several banks, including Germany-based Fidor and the Commonwealth Bank of Australia, along with Western Union. The protocol uses a distributed, open-source ledger to record all transactions, much like bitcoin, but works with transactions denominated in real-world currencies as well as Ripple’s own digital currency. “Banks are actively exploring what opportunities decentralized ledger-based solutions could bring,” said Gareth Lodge, an analyst with Celent. “The challenge is finding a way to harness the benefits, yet ensure the absolute essentials—security, compliance and resilience—are met, along with an understanding that payments involve far more than just a movement of value.”
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