Ripple Tech Will Be Used For New International Payment Service Between Japan And Brazil
The MUFG Bank, Japan's largest bank, has established a Memorandum of Understanding (MOU) with a Latin American bank with the aim of using Ripple to facilitate international money transfer.
The MUFG Bank, Japan’s largest bank, has established a Memorandum of Understanding (MOU) with a Latin American bank with the aim of using Ripple to facilitate international money transfer.
In the MOU, the two financial institutions will collaborate on a new venture aimed at making cross-border money transfer between Japan and Brazil possible.
According to a November 9, 2018, official press release, MUFG and Banco Bradesco, a banking institution headquartered in Sao Paulo, Brazil will develop a payment service that will make the sending of money across borders secure and fast.
Ripple (XRP) to power new payment service
MUFG’s announcement revealed that the collaborating institutions settled on using Ripple’s protocol, whose native token XRP powers the blockchain company’s xRapid solution.
The Japanese finance giant notes that “Ripple’s cutting-edge technology” will be used to help the banks come up with a tool that helps commercialize payments sent and from Japan and Brazil.
Ripple tweeted about the partnership between the two banks and its role, saying that MUFG and Bradesco would “leverage” its technology in the new payment system.
This means that the two banks will rely on the San Francisco-based company in integrating its transaction speed, blockchain transparency, and traceability into the new payment system.
MUFG’s interest in Ripple isn’t new
The decision to use Ripple in its latest business engagement isn’t the first time MUFG is being connected with Ripple.
In November 2017, Japan’s premier bank was among the world’s leading banking institutions to join Ripple’s burgeoning RippleNet.
The group brought together top banks that sought to use Ripple’s blockchain solutions to reduce inefficiencies and high costs within the global banking sector.
Other major banking institutions to join RippleNet were Spain’s largest bank Santander, Bank of America, and Credit Agricole of France.
And in September, the bank’s representative stated that MUFG would consider using Ripple since the latter’s technology would help reduce costs as well as time taken to settle payments.
The representative acknowledged that reducing costs and cutting SLA from a high of three days that is common with traditional SWIFT channels.
Ripple’s XRP adoption
Ripple’s XRP has experienced a surge in prices over the last few days, buoyed by the increased adoption of the platform’s technological solutions and speculations about potential partnerships.
The bullish outlook for the XRP token saw it briefly become the second largest cryptocurrency by market cap, overtaking Ethereum (ETH).
However, XRP’s performance in the future will likely depend on one thing; one that may count in its favor – the potential for xRapid to gain global adoption.
Early October this year, Ripple announced the xRapid was commercially available and that three payment companies would integrate the product in their services.
Despite that positive move, it’s plausible to say that xRapid needs an endorsement from a global financial institution – one that will spur demand for Ripple’s native XRP token.
At the moment, two financial giants in SBI Holdings and American express are said to be testing the solution. In the meantime, however, MUFG and Banco Bradesco are more step for Ripple as it looks to strengthen its position in the market.