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Brad Garlinghouse: FIs are already using XRP in their payment flows


hallwaymonitor
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Saturday november 17 i made a banktransfer from Thailand to Holland.

THB/EURO

western union had the exchange rate of almost 41 and transaktion fees/commision for 2250 THB.

SCB had the exchange rate of almost 38 and teansactionfee/commision of 550 THB.

At SCB they Said transfer could take 3-5 bankdays. We where There on saturday, on monday the money was on the Holland account. If bankdays not involve saturday and sunday it means the transfer was made the same day :)

Sounds at least interesting since the fee and the time was really low and fast. The amount to send was 48000 THB or about 1300 Euro.

 

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On 11/13/2018 at 1:08 PM, aye-epp said:

I feel that Brad is an intelligent man.  He's also held a handful of upper management positions.

He purposely said, and meant, "Financial institutions like banks" for a reason rather than simply "Banks"

Yes but I think he also purposely said "Financial institutions like banks" rather than simply "Financial institutions"

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21 minutes ago, Naweed said:

Bank of America has an exclusive agreement with Ripple and can veto other major banks joining or use specific tools developed by Ripple. I can't remember the exact sentence used in our internal doc, but it was something along those lines. 

Say whaaaat?!?     Are you saying that you are an insider in Bank of America,  and that your bank can exclude other banks joining Ripplenet and can dictate what Ripple products they are allowed to use?

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38 minutes ago, Tinyaccount said:

Say whaaaat?!?     Are you saying that you are an insider in Bank of America,  and that your bank can exclude other banks joining Ripplenet and can dictate what Ripple products they are allowed to use?

Precisely. Which is why mainly Tier 1 banks haven't jumped on board with Ripple and having to use inferior substitutes e.g. JP Morgan and Citi using alternatives. 

Bank of America are strategically using Ripples offerings (not XRP at this time) to basically provide a competitive advantage when it comes to clearing, settlement etc. Citi and DB are renowned for their FX expertise to their clients and in due course will find Bank of America eating away at their market share. 

From my understand, Bank of America and the other Banks that are using Ripples services are strategic. Its because a large part of their client base need/trade with the likes of Santander (LATAM) and MUFG (Asia). It is a win-win for all of them. 

The more banks that join the Ripple network the more effective and powerful the tools become because you can settle with a lot more clients and trade more competitively (from a price point). Obviously Bank of America and I would suggest its the same for the founding Banks share "common goals" and clients. They won't allow competitors in their respective brackets to join largely because they'll lose that competitive edge. 

Bank of America and MUFG I would consider tier 1, but they aren't direct competitors. One services the west, the other east. So that partnership works. Santander is Tier 2 but dominates that LATAM market. So both Bank of America and MUFG with Santander have a nice global coverage. 

For those more interested in the capital side of things, you will know that regulation is largely focused on Banks holding capital (basically funds that must be held by the bank and not traded). This is costly in the sense that its money just sitting there... Which can't be used to make more money. Under certain regulation, Banks have to hold more capital because of liquidity and settlement issues under stress scenarios. If financial institutions can provide that real time settlement and liquidity (through Ripple) can minimise those risks, then a portion of that mandatory capital can be limited or minimised. So it's really powerful in having efficient clearing and settlement systems. 

Edited by Naweed
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1 hour ago, Naweed said:

Bank of America has an exclusive agreement with Ripple and can veto other major banks joining or use specific tools developed by Ripple. I can't remember the exact sentence used in our internal doc, but it was something along those lines. 

This seems to me to be too strong statement to be stated just in a way "... it was something along those lines". Can you really prove this?

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1 hour ago, Luinorn said:

This seems to me to be too strong statement to be stated just in a way "... it was something along those lines". Can you really prove this?

I'm not sure you understand how competitive Investment Banking and post trade services are. Its an extremely lucrative business. 

1 hour ago, cmbartley said:

When does that expire?

Well Ripple aren't allowed to provide implementation incentives to JP Morgan or Citi or their use of Xcurrent subject to BOA consent. This lasts 24 months from contract signing. I don't have details of the official contract signing date. 

BOA have a right to upgrade their terms if other Ripplenet members are given more favourable terms. 

Ripple also provide light introductions to third parties for Bank of Americas clearing and FX relationships. 

Bank of America can pull out at anytime of they determine exposure to an unacceptable amount of reputational risk. 

Edited by Naweed
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2 hours ago, Tinyaccount said:

Say whaaaat?!?     Are you saying that you are an insider in Bank of America,  and that your bank can exclude other banks joining Ripplenet and can dictate what Ripple products they are allowed to use?

Thank you for the reply to the above question but can I just ask you to clarify a bit?

Are you an insider in Bank of America?

Have you seen a Bank of America document or agreement that shows Bank of America can exclude other banks from joining Ripplenet?

Can Bank of America exclude other banks in Ripplenet from using certain Ripple products?

Also can I follow up and ask...    How long has that been the case and when does it end if ever?

Edit: tagging @Naweed 

Edited by Guest
Forgot to tag Nawed
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46 minutes ago, Ohbithandle said:

Thanks for your insights, @Naweed. The really interesting question at this point for me would be what has BoA  promised Ripple in return.

Bank of America is a tier 1 bank, its at the forefront of regulation and setting examples for the industry. Its great marketing and examples of real world tangible benefits. If the technology pays off Ripple will making a killing. So will Bank of America with its first mover advantage. 

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