SBI Holdings, a massive Japanese financial service provider, thinks that Ripple will be an important part of the global settlement system. The company talked about the rising importance of Ripple, their XRP token and the R3 consortium in its nine-month financial report that was released a few days ago.
At the time of writing, SBI shares are trading at 2,227 JPY, which values the company at more than 500 billion JPY, or well over 4 billion USD. The company offers a range of financial services and was also the first bank to launch a cryptocurrency exchange, in July of last year.
The financial report from SBI was very positive on Ripple and XRP. It contains a section titled “Business Area Separation of Ripple and R3,” which states that Ripple is an entity, “specializing in international remittance,” and also says that the R3 consortium is developing platforms which, “are not limited to the financial industry by using smart contract-based technology.”
SBI Notes the Importance of XRP and R3’s Corda Blockchain Platform
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The recent report from SBI made special note of XRP’s inclusion on R3’s Corda Settler platform. Last year Ripple Labs and R3 were able to get past a lawsuit, which had been hindering cooperation between the two entities. As a result of the agreement, Ripple’s XRP was added to R3’s Corda Settler as the first crypto that could be used as a currency.
Corda Settler has the potential to be a robust tool for international trade settlement, as well as a new way for banks to clear transfers without the involvement of central banks, or the SWIFT system.
The progressive development of these technologies could be part of the reason why SWIFT and R3 announced that SWIFT would be connecting SWIFT’s GPI Link gateway with R3’s Corda platform, in a trial of the system.
R3 co-founder Todd McDonald said that, “SWIFT GPI will integrate directly to Corda Settler, the application that allows participants on the Corda blockchain to initiate and settle payment obligations via both traditional and blockchain-based rails,” and that, “This will enable obligations created or represented on Corda to be settled via the large and growing SWIFT GPI network.”
Growing Use Cases
The fact that SWIFT is finally coming around to realize how much blockchain-based systems could hurt their business should reinforce the view that blockchain isn’t a fad, and is only going to become more important as time goes on.
SBI got to the R3 Corda party early and made a substantial investment in R3 last year. They already have the license to use R3 Corda in Japan, but they may be thinking bigger.
According to SBI’s website, “We are also considering business development not only for Japan but also for East Asia. The SBI Group is expanding its capital and alliance with digital asset-related venture companies to build digital asset-based ecosystems.”
Is There Room For SWIFT and an Aging Financial System?
Systems like SWIFT emerged at a time when Western banks had a monopoly over financial services outside of the Soviet Union. Today, the global world order is very different, and it is also changing quickly.
The US has attempted to sanction Iran and Russia into submission, but it hasn’t worked out as planned. If the same Western banking powers that created a massive push-back against the existing financial system from China and Russia attempt to monopolize the next global financial system, they may find themselves out of luck.
Blockchain-based systems like XRP allow an unprecedented amount of financial connectivity globally and are in no way exclusive. Just because R3 Corda accepts XRP, that doesn’t mean other platforms are hindered from using the very same token.
In a world without a monopoly on money and banking, entities like SWIFT have to compete based on merit. XRP can be transferred in numerous ways, why would anyone choose to use a system that is so clearly a political tool of the US government?
That is a good question. SWIFT most certainly a tool of the western banking elite. What Ripple and XRP have been trying to do is disrupt that old boy’s system with their RippleNet system. Not surprisingly Ripple and XRP have found most resistance in the U.S.–where it is falsely called the “banker’s coin.” This agreement with R3 opens the door but SBI owns both them and Ripple and knows which way the wind blows.