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musclehog

westpac added to the customer page on ripple.com

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On 8/4/2019 at 3:58 AM, LeonidasH said:

Westpac logo has been there for quite some time. This screenshot is from June 16th 2018.2018-6-16.png.e7786dfe58300405f61057de04cf3926.pngJune 

Yeah, so is BMO harris. The did the R3 trial with Ripple back in 2016 but when I go to make a transfer today, its still SWIFT. Basically means not all of the ones listed utilize Ripple in production.

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Westpac’s institutional bank, said the latest R3 tests are encouraging and the technology is working. But the use of blockchain for cross-border payments will not be adopted at scale until central banks issue digital versions of their own fiat currencies, he said. This would allow banks to transfer value on a distributed ledger using a currency backed by a central bank rather than having to rely on cryptocurrencies like Ripple’s XRP or bitcoin, which remain volatile.

“We would not want to use a cryptocurrency in real life as there is too much risk. We want something backed by reserve banks,” he said.

“If we had a currency created by the RBA – a digital Aussie dollar – that existed on a shared ledger, you don’t need the RBA in the middle saying it has credited one bank and debited another. The transaction is done between two banks directly. And we would only need to hold a fraction in digital currency of the millions of dollars held in nostro accounts all over the world right now.”

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14 hours ago, Freaky said:

Westpac’s institutional bank, said the latest R3 tests are encouraging and the technology is working. But the use of blockchain for cross-border payments will not be adopted at scale until central banks issue digital versions of their own fiat currencies, he said. This would allow banks to transfer value on a distributed ledger using a currency backed by a central bank rather than having to rely on cryptocurrencies like Ripple’s XRP or bitcoin, which remain volatile.

“We would not want to use a cryptocurrency in real life as there is too much risk. We want something backed by reserve banks,” he said.

“If we had a currency created by the RBA – a digital Aussie dollar – that existed on a shared ledger, you don’t need the RBA in the middle saying it has credited one bank and debited another. The transaction is done between two banks directly. And we would only need to hold a fraction in digital currency of the millions of dollars held in nostro accounts all over the world right now.”

The problem with that 2016 Westpac quote from the AFR is that it makes no sense when examined closely.

“If we had a currency created by the RBA – a digital Aussie dollar – that existed on a shared ledger, you don’t need the RBA in the middle saying it has credited one bank and debited another. The transaction is done between two banks directly."

Sure, a participant bank in Aus could send a digital asset to another bank in India without clearance via a CCP, but the bank in India in the Westpac statement will only receive $AUD issued on the RBA's DL. Pointless.

Which means that this statement is nonsense. "And we would only need to hold a fraction in digital currency of the millions of dollars held in nostro accounts all over the world right now.” 

The quote, and the rebuttal of DA's (especially one designed as a bridge currency) doesn't deal with the FX/Nostro problem which turns out to be quite tricky to resolve if you're trying to build national W-CBDCs integrated into your national CB RTGS systems: https://waa.ai/O8JU

In  3.2.1 (Fig 7) of the pdf, Ripple ODL is playing the role of IntA(local) and IntB(Foreign), and its live now while the other two options have significant problems/barriers and both require some form of Nostro account.

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6 hours ago, vinylwasp said:

The problem with that 2016 Westpac quote from the AFR is that it makes no sense when examined closely.

“If we had a currency created by the RBA – a digital Aussie dollar – that existed on a shared ledger, you don’t need the RBA in the middle saying it has credited one bank and debited another. The transaction is done between two banks directly."

Sure, a participant bank in Aus could send a digital asset to another bank in India without clearance via a CCP, but the bank in India in the Westpac statement will only receive $AUD issued on the RBA's DL. Pointless.

Which means that this statement is nonsense. "And we would only need to hold a fraction in digital currency of the millions of dollars held in nostro accounts all over the world right now.” 

The quote, and the rebuttal of DA's (especially one designed as a bridge currency) doesn't deal with the FX/Nostro problem which turns out to be quite tricky to resolve if you're trying to build national W-CBDCs integrated into your national CB RTGS systems: https://waa.ai/O8JU

In  3.2.1 (Fig 7) of the pdf, Ripple ODL is playing the role of IntA(local) and IntB(Foreign), and its live now while the other two options have significant problems/barriers and both require some form of Nostro account.

Regardless of whether you think it makes sense or not, the risk appetite to use crypto is not there. That is the takeaway message from the article and that sentiment has not changed 3 years on.

If the trials were successful as stated why has adoption not happened yet ?

The recent Litepay remittance scandal was a disaster for the bank. Failure of AML reporting, unreported payments linked with known child exploitation rings, was enough to be the downfall of a CEO, shakeup of the board, and reputational damage leading to customers leaving in droves.

The fallout from the Royal Commission and every regulatory watchdog have the big 4 under their microscope, and you think they will adopt a crypto based remittance sysem any time soon ?

https://www.afr.com/companies/financial-services/westpac-shut-remittance-firms-over-money-laundering-risk-20191126-p53e3w

Edited by Guest

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1 hour ago, Freaky said:

Regardless of whether you think it makes sense or not, the risk appetite to use crypto is not there. That is the takeaway message from the article and that sentiment has not changed 3 years on.

If the trials were successful as stated why has adoption not happened yet ?

The recent Litepay remittance scandal was a disaster for the bank. Failure of AML reporting, unreported payments linked with known child exploitation rings, was enough to be the downfall of a CEO, shakeup of the board, and reputational damage leading to customers leaving in droves.

The fallout from the Royal Commission and every regulatory watchdog have the big 4 under their microscope, and you think they will adopt a crypto based remittance sysem any time soon ?

https://www.afr.com/companies/financial-services/westpac-shut-remittance-firms-over-money-laundering-risk-20191126-p53e3w

Is that an opinion based on what you've read and Westpac's subsequent lack of contrary public announcement or actual inside knowledge from a CTO/CRO perspective?

I have no particular view either way as I'd happily let the remittance companies break any aspect of the stranglehold the Big4 oligopoly has on banking in Aus but what is clear is that the RBA CBDC model idea outlined in the AFR article doesn't stack up, nor does the volatility argument given, and neither does the 'banks won't use crypto' argument either as no bank ever needs to own or process any XRP, all it has to do is call an API.

You might be right about Westpac's risk appetite, but given the liar loan debacle of 2018 and the money laundering you've cited above, I'd say they've demonstrated they have a fairly large risk appetite if it helps the bottom line, and Ripple can do that while transferring much of the forex, credit, settlement, and operational risk onto a 3rd party while also freeing capital and reducing other associated Nostro costs (e.g. funding) at the same time. Unfortunately for Westpac they'd still be on the hook for KYC, AML and CTF checks.

The question that's still not answered is why they're listed as a Ripple customer, and more importantly for me, how and why they're a member of the Ripplenet Committee.

I've worked at a few different financials globally, and as you'll know they don't give 3rd parties a seat at a technical/governance forum like the Ripplenet Committee unless those 3rd parties have significant skin in the game. Its not like a board seat you can just buy your way into.

Edited by vinylwasp
Changed never to ever.

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14 minutes ago, vinylwasp said:

Is that an opinion based on what you've read and Westpac's subsequent lack of contrary public announcement or actual inside knowledge from a CTO/CRO perspective?

I have no particular view either way as I'd happily let the remittance companies break any aspect of the stranglehold the Big4 oligopoly has on banking in Aus but what is clear is that the RBA CBDC model idea outlined in the AFR article doesn't stack up, nor does the volatility argument given, and neither does the 'banks won't use crypto' argument either as no bank ever needs to own or process any XRP, all it has to do is call an API.

You might be right about Westpac's risk appetite, but given the liar loan debacle of 2018 and the money laundering you've cited above, I'd say they've demonstrated they have a fairly large risk appetite if it helps the bottom line, and Ripple can do that while transferring much of the forex, credit, settlement, and operational risk onto a 3rd party while also freeing capital and reducing other associated Nostro costs (e.g. funding) at the same time. Unfortunately for Westpac they'd still be on the hook for KYC, AML and CTF checks.

The question that's still not answered is why they're listed as a Ripple customer, and more importantly for me, how and why they're a member of the Ripplenet Committee.

I've worked at a few different financials globally, and as you'll know they don't give 3rd parties a seat at a technical/governance forum like the Ripplenet Committee unless those 3rd parties have significant skin in the game. Its not like a board seat you can just buy your way into.

I work there

Edited by Guest

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1 hour ago, Freaky said:

I work there

Ok, so if you have sufficient inside knowledge as a current employee to say that using Ripplenet is outside Westpac's risk tolerance, can you explain why they remain listed as a Ripple customer and more importantly, why they became a member of the Ripplenet Committee and how and why they've maintained their seat at the table from 2015 until now? Quite simply, if Westpac doesn't have a vested interest why bother, and if they're not an active user or in testing/development what value can they bring to the committee, and why would Ripple keep them at the table.

The questions and the long term commitment of resources by Westpac and subsequent statements like the one below (which is still on the Ripplenet Committee page today) don't line up with your insider information.

image.thumb.png.744e91ed3574b9b71b3c6fc2de3a76cb.png

If Westpac weren't happy in 2019 (long after Mike left Westpac for CBA), that the comment above still reflected their views, they'd simply ask Ripple to take it down. And from what Mike talks about below at Sibos in 2016 it sounds like Westpac had identified a strong business case, the POC went very well and they were hungry for the first mover advantage. Lack of visible activity does not mean they have no risk appetite.

But maybe you're right and Mike was poached by CBA to lead their cross-border payments revolution and the Westpac initiative died when he left, but then why are they still on the Ripplenet Committee in 2019?

Mike's now the Executive Director of New Technology Product Initiatives over at CommBank so I wouldn't be surprised if that's exactly what he's doing. Please no-one quote me, this is 100% pure speculation.

 

Edited by vinylwasp

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