Dilip Ratha, the chief economist of the World Bank for Migration and Remittances, spoke to Money2020 Asia about remittance trends around the world and provided some useful tips on the future of their costs.
Ratha said that one of the World Bank’s strategic sustainable development goals is to reduce the cost of remittances globally from 7% to 3% by 2030. When Ripple CEO Brad Garlinghouse took the stage, he immediately reconnected these statistics to Ripple’s goal of creating a valuable Internet.
“If we have not lowered the cost of remittance payments by 300 basis points by 2030 as a company, we have failed,” said Garlinghouse. “If we succeed, we are not talking about 300 basis points. We are talking about 30 basis points for the cost of remittance payments “.
The statement itself is audacious and the potential positive impacts of reducing the remittance costs could be exponential for the global economy. In Garlinghouse’s vision of the future, he is confident that a $ 200 payment would cost an average of 60 cents instead of $ 14 as today.
If Ripple’s Internet of Value is established in this same timeframe, not only will the cost of cross-border payment be drastically reduced, but in theory it would also be the time it takes money to move from one country to another. In this vision, the necessary time is immediate.
A question posed to Garlinghouse concerned how Ripple’s xCurrent solution was compared to the SWIFT system historically used by financial institutions to settle cross-border payments. Garlinghouse did not hold back the reason why blockchain-based solutions are superior.
“The error rate published by SWIFT is six percent,” said Garlinghouse. “Imagine if six percent of your emails had not passed without further human intervention.”
Garlinghouse also responded to the criticism of Ripple XRP and market volatility:
“We are talking about three seconds of volatility risk when using XRP for cross-border payments,” Garlinghouse replied. “The reality is that you are exposed to greater volatility when you make a traditional transfer with legal currencies, which takes several days.”
“The reality is that we are working with decentralized technology,” said Garlinghouse. “If Ripple goes away, and I really hope it does not happen, the Led XRP register will continue to exist.”