On November 22, 2017, Axis Bank, one of India’s largest private sector banks, unveiled its new instant payment service system in partnership with Ripple. Retail channels can now choose to receive payments from UAE’s RAKBANK, while Standard Chartered Bank in Singapore will facilitate transactions for Axis Bank’s corporate customers.
Ever since Ripple first entered the blockchain market, its mission has been to deliver blockchain solutions to banking infrastructure through its real-time gross settlement system (RTGS) and accompanying cryptocurrency, XRP. This system, also known as the Ripple Transaction Protocol (RTXP), obviously heavily relies on a blockchain-based ledger system. Furthermore, the company has single-handedly spearheaded XRP to become one of the few major cryptocurrencies to be compliant with most regulations worldwide.
The new platform release comes almost a year after Axis Bank first announced their collaboration with Ripple, at the time of which, the bank aimed to improve cross-border transactions. Ripple boasts a growing list of international financial institutions as partners, including MasterCard for example. At the current rate of adoption, it will not be long before Ripple’s RTGS platform becomes a very popular choice for most large-scale, remittance-based transactions in the world.
The President of Transaction Banking at Axis Bank, Himadri Chatterjee, is of the belief that innovation around international remittance has remained mostly stagnant in the past few years, while simultaneously, a huge push for improving domestic payments has been made instead. The bank’s partnership with Ripple and implementation of blockchain technology into the bank’s cross-border transaction system are the first steps to solve that problem. He went on to say that the bank remains optimistic about the technology’s future potential to augment several aspects of the finance industry.
Mass and standardized adoption of blockchain technology in the finance ecosystem is still a distant dream in 2017. Even so, however, Axis Bank’s new platform is hardly the first attempt by Indian banks to reconcile blockchains with the rest of the finance industry. In October of 2016, ICICI Bank was the first Indian bank to begin fulfilling international trade, finance and remittance transactions using a blockchain. Shortly after, YES Bank also started using blockchains to facilitate vendor financing.
Earlier in November 2017, the country’s largest public sector financial institution, State Bank of India, also announced the initial beta launch of its BankChain platform. A consortium of 27 banks from India and the Middle East are part of this initiative. Even the banks that have made their own individual advancements in integrating blockchain technology into their ecosystem are part of this platform, including ICICI Bank and Axis Bank. The goal of BankChain is to improve the security and efficiency of different facets of traditional banking, using, for instance, blockchain-enabled smart contracts.
Since Ripple’s release in 2012, XRP has become the fourth largest cryptocurrency by overall market capitalization. Unlike Bitcoin and Ethereum, both of which have seen a tenfold increase in the prices of their respective cryptocurrencies in 2017 alone, XRP’s value has not seen much volatility. This fact, combined with Ripple’s push to become a legitimate provider of its blockchain-based RTGS system, has made XRP a very popular cryptocurrency for enterprise applications.