Ripple Labs has announced the inclusion of US-based PNC Bank into its growing network of banks and financial services institutions. With this development, customers of PNC Bank would be able to send and receive cross-border payments in real time.
This announcement from Ripple on its website came earlier this week amidst growing adoption of blockchain technology by banks across different geographies. Riding on the news of this partnership and the recent announcement of the upcoming launch of xRapid liquidity solution, the native cryptocurrency XRP has seen an upward movement in its price over the last few days.
Ripple Labs Inc. is a US-based fintech company behind the open-source blockchain based solution created explicitly for banking and financial services sector. The Ripple Network, which facilitates cross-border payments and real-time gross settlements (RTGS) across its member banks, uses the XRP ledger to record the transaction details. The decentralized system uses the servers of the member banks and independent institutions like MIT for validation of transactions. The network uses the Xcurrent solution to facilitate the transfers.
However, unlike Bitcoin, Ethereum or other popular blockchains, Ripple does not use the proof of work or proof of stake consensus algorithms. This helps Ripple to achieve a higher throughput of 1500 transactions per second. As per Ripple Labs, the network is scalable and can match Visa’s current performance of 50,000 transactions per second.
To date, Ripple has been successful in onboarding more than 100 banks (across 40 countries) and leading financial institutions like Banco Santander, Standard Chartered, Japan Bank Consortium, and American Express onto RippleNet.
Ripple’s Senior Vice-President, Marcus Treacher, expressed the company’s pleasure at bringing a major US bank like PNC Bank into the fold:
For far too long, the technology underlying cross-border payments has been opaque, slow and costly. […] Quite a few payment providers have joined RippleNet recently, so it’s great to see one of the major U.S. banks come on board as well.
About PNC Bank
PNC financial services group, headquartered in Pittsburgh, ranks among the top 10 banking and financial services institutions in the US. It is a publicly listed 160-year old banking corporation with operations in 19 American states. The company operates a massive infrastructure of 2459 branches and 9051 ATMs serving more than 8 million customers.
With this partnership, PNC joins a growing list of banks looking to leverage the potential of blockchain technology, to deliver instant and cheaper money transfer services to its customers. Blockchain technology enables instant remittances with a low fee, unlike the currently used SWIFT system which takes 2-3 days for cross-border payments with an average fee of 7.5%.
Chris Ward, Executive Vice President at PNC Treasury Management has expressed that the partnership with Ripple is in line with their goal to provide secure and instant digital payments to their customers:
As the global economy becomes increasingly digital, the need for real-time payments globally is critical. […] We are focused on providing our clients with capabilities that enable making secure digital payments in an instant, whether they are sent across the street or across the world.
Ripple Price action
For holders of Ripple’s XRP coin, this is a welcome development and has brought smiles in midst of a gloomy and bearish cryptocurrency market. The current price of the cryptocurrency is hovering around $ 0.58 after experiencing a 24-hour jump of more than 60% in its value. XRP, which reached its all-time high price of $ 3.92 in January of this year, has experienced a drop of 85.55% since.
At the time of this writing, Ripple’s market cap stands at $ 22.62 billion and has edged out Ethereum to occupy the number two spot behind Bitcoin.
Do you think this partnership will encourage more US banks to adopt Ripple? Let us know your thoughts in the comments below.
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