Ripple’s effectiveness in the financial industry especially in cross-border transaction realm has been rousing dispute in the sector on whether the altcoin is complementing or debasing banks even though banks and other financial are partnering.
It is no news that blockchain industry is growing far and wide as it continues to gain embracement from nooks and crannies of the world. With the invention of new and existing altcoins, cryptocurrency, a subsidiary of blockchain technology has brought magnificent honour to the financial world, revolving the previous archaic methods of running transactions from a crude type, which have been flagged with many criticisms to a mechanized one.
While various altcoins have pose significance in sundry of areas, Ripple stands to be very efficient in cross-border transaction to the tune that it has been tagged cross-border specialist, which is one of the major activities of banks.
Before now, when people had issues with transferring funds across the border based on time, cost and convenience, they sorted for other means and the invention of means like MoneyGram, PayPal and Western Union were injected into the financial atmosphere.
Later, their satisfaction diminished as new faults were found. People wanted instantaneous transfer of money across the border with meager cost, easy and perhaps decentralized away for regulations. Surely ripple was a perfect substitution for this because its transaction cost is almost negligible, while it transaction time is about 4 seconds, running around 1500 transaction in a second.
Ripple stood out to be efficient, capable, calling for great attention amongst which banks and other financial organizations like Santander bank, Western Union, MoneyGram, LianLian and others featured by partnering with the financial firm.
How Ripple Complements Banks
Banks have been surrounding Ripple with songs of praise that the altcoin is enhancing its activities. To start with, Saudi Arabian Monetary Authority (SAMA) said it saves its banks about $200 -$400 million annually and Santander bank disclosed that with the use of Ripple tools, they will be the “first large retail bank to carry out cross-border payments at scale with blockchain technology”. The General Manager, Bank of Tokyo-Mitsubishi UFJ, Hirofumi Aihara, also noted: “We are very pleased to be working with Ripple to provide new types of payments services to change our customers’ experience using the power of the blockchain technology.
How Ripple Threatens Banks.
While the complementing news came from the banks, some observers and analysts perceive the relationship of Ripple with banks in another perspective saying Ripple is a threat to banks and why banks are collaborating is that they are left with no choice. They said comparing the remittance speed of banks which is like the pace of snail to Ripple’s is evident enough.
The president of Global blockchain, Shidan Gouran, said “if big banks were to succeed in crushing one of these two currencies, Ripple would be it,”
“The main reason for this is because Ripple is much more of a direct competitor to banks. Because it operates more like a transaction network than a currency, it’s a lot more plausible that they will be a target for banks to get tough with. Whereas because Bitcoin operates more like a currency, they don’t pose the same threat.”
From Shidan Gouran’s statement one could deduce that the statement also means that Ripple threatens banks, plans to take over banks with its tools, and it is showing much capability of burying banks as it operates like banks in a better way.