FIs leverage blockchain to power X-Border payments

In discussions about blockchain technology and its effect on payments, the idea that cryptocurrencies like Bitcoin will replace fiat money abounds.

While arguments for and against the feasibility of such a hypothetical future tend to divide opinion, several tokens are already driving cross-border transactions for some of the world’s largest financial institutions (FIs).

For example, the Ripple and Stellar blockchains with their respective XRP and XLM tokens have been deployed by banks and payment service providers for a variety of international and domestic transaction types.

Since its inception in 2012, Ripple has set itself apart from other blockchain projects in design, governance and ambition, choosing to focus on bringing FIs together to realize the potential of distributed ledger technology and create a more efficient transaction mechanism than those that characterize the global economy Today.

And among the products connecting the global network of banks and payment providers using Ripple’s distributed finance technology, known as RippleNet, is the on-demand liquidity solution xRapid.

See more: Ripple, Brazil’s Travelex Bank Add Crypto-Based X-Border Payments

By using XRP tokens to create on-demand liquidity, xRapid seeks to lower capital requirements for FIs transacting in multiple currencies, with significant benefits for transactions to emerging markets, where currency liquidity is typically low.

The latest companies to implement xRapid payments on RippleNet are French FinTech Lemonway, which specializes in enabling payments for marketplaces, and Swedish money transfer business XBaht, which enables cross-border transfers between Sweden and Thailand.

Related: Lemonway, Tink Par up open bank payments across Europe

Pays with Stablecoins, Fiat

Banks have also utilized RippleNet to streamline cross-border payments, so that they can pass on lower transaction costs and faster processing times to customers.

Early adopters of the technology include Bank of America and PNC Bank. But in recent years, Ripple has gained traction in Europe and the Middle East, with the likes of Santander, Standard Chartered and Qatar National Bank (QNB) deploying the network to power cross-border payments.

Read on: QNB unveils new payment services in Qatar

Of course, cross-border transactions are not the only ones that need more efficient solutions.

Before the recent announcement, Lemonway already implemented the technology in the euro-to-euro payment corridors thanks to Nium’s global money transfer network, which uses RippleNet for its speed and cost efficiency.

However, Ripple is not the only player making waves in the blockchain space. As Nium’s head of crypto and Web3, Joaquin Ayuso de Paul, told PYMNTS earlier this year, Nium leverages another blockchain technology, Stellar, to help international customers pay out in more than 100 currencies to over 190 countries.

Read the interview: Market Crash Tests Crypto’s Survival of the Fittest

According to Ayuso de Paul, because Stellar makes it easy to shift crypto-assets, companies using Nium can leverage the technology to make stablecoin payments on one end and pay out fiat on the other.

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