Ripple has been proposed to the Federal Reserve for Interbank settlements

The Ripple company sees benefits for Interbank settlements

A proposal was submitted on December the 13th 2018 by Ripple addressing to the U.S. Federal Reserve about the application of a potential Federal Reserve action to support inter-banking settlements for faster payments.

According to the document provided, the digital era is fundamentally changing the nature of daily transactions in commerce. There is now a gap that is in between the capabilities of traditional payment methods and the expected payment capabilities that are expected in the digital era. Which means the capability of faster, more accessible and convenient transactions.

Payments can now be sent faster, allowing payments to be sent and received instantaneously, and at any time. This has pushed the Federal Reserve to work together with payment industries in order to determine the best ways forward to present the enjoyment of fast payments to the public.

ripple federal reserve

According to the Federal register, faster payments in the United States through real-time interbanking settlements will be the main objective of the submission.

The Ripple company has explained that:

“Real-time interoperability between domestic and cross-border systems is a critical capability to enable ubiquity and efficient reach. A variety of central banks and market infrastructures are exploring the capabilities using open-source protocols and Distributed Ledger Technology. There is great potential in these technologies, especially in enabling interoperability and real-time cross-border transactions.”

The Ripple foundation sees great potential in leveraging assets

According to the document provided, Ripple has suggested that new systems must be explored, while using digital assets to liquidate or to be used as a settlement tool.

The team thinks that it is great for cross-border transactions, as they stated that:

“By leveraging new technologies, the U.S. can position itself to best meet not only the needs of the market today, but also for quick payment changes in the future.”

Through the proposal that Ripple has submitted, they have urged the Federal Reserve to publicly disclose any expected future roles in the payment sector. This will give the market greater certainty in planning its strategies towards investments. Markets will be able to hold off on making any investment decisions until it has a greater certainty of the federal reserve’s role in the payment sector.

The ripple company has been working to ensure a border payment settlement gateway, with its recent deal with the National Bank of Kuwait(NBK) to enable the RippleNet’s blockchain technology to be used for online banking. Pricewatercoopers expects that more banks will be entering the crypto space in the upcoming years.

What do you think of this development by Ripple? Please feel free to leave a comment down below.


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