Japanese Banks Are Starting to Use the Ripple Network

Ripple, the San Francisco blockchain startup, announced this week that they will move forward with integrating Ripple’s technology from a pilot test into the real Japanese banking system. Japan’s agreement with Ripple includes 15 different Japanese banks that will allow 24hr instant money transfers.

The larger banks including Bank of Tokyo Mitsubishi UFJ and Sumitomo Mitsui Banking Corp, will be the first to process the money transfers in February. The other banks will be added to the network next spring. According to the World Trade Organization, Japan has a history of $1 trillion in cross-border payments annually.

Quick International Fiat Settlement

Normally cross-border payments take 2-5 business days and have many expensive fees attached to the transaction. Ripple payment transactions normally take seconds and have low fees.

Ripple completed a real time transaction with two banks in different countries. The payment was $1000 CAD to EUR and the ripple network processed the FX rate and calculated the fee instantly. The payment of 680 EUR was received from both parties within 10 seconds. Also, the transaction was updated and posted on Ripple’s blockchain, which can be easily traced and sent with higher security.

Ripple’s utility will increase as the network grows. Payments can be sent from country to country without any hassle or delay. The most powerful part of the Ripple network is the possibilities for vertical integration, with other companies partnering with Ripple and banks.

Traders can withdrawal and deposit using the Ripple network instantly and online retailers will be able to receive payments overnight. The Ripple blockchain may start a domino effect, as more financial institutions realize how much money can be saved by reducing settlement times.