Traditional financial institutions today are in a race for faster and up to date banking technology. Ripple is positioning itself as the solution to significant banking inefficiencies. Consequently, banks are investing in blockchains lest they are outdone. In January 2019, for instance, Ripple made an announcement that it had over 200 global banks as their partners.
Banks, due to technological advancements, have found themselves in a sink or swim situation. Their market is flooded, yet filled with finicky, demanding customers. The fast and affordable transactions speeds that Ripple brings will help them stand out from the pack. Ripple has also partnered with the Gates Foundation‘s MojaLoop, to build a financial internet for the financially marginalized.
The Ripple and IMF Alliance
Ripple, however, seems focused on tackling more than the SWIFT banking network. The startup’s co-founder Chris Larsen is going to be a part of the high-level discussions on Fintech and the future of finance with the International Monetary Fund. The IMF had this panel before and discussed the vital need of the cross-border consensus. Other worthy mentions in the discussion were the role of AI, mobile computing, and distributed ledger technology on FinTech sector growth.
The former panel had nineteen of the worlds of finance and technology sectors most renowned names. The 2019 panel will have Jeremy Allaire, the CEO of Circle, Marco Santori the president Blockchain.com as well as Adam Ludwin of Chain. Christine Lagarde, the IMF director earlier in the year underlined the critical need for banks to adapt.
She asked banks to act upon innovative new technology to give the customers better services. Furthermore, Lagarde warned banks, urging them to adapt while noting that Ripple and Circle are critical for their (banks) survival.
“I think in the banking system at large in many, many countries; the difference will not be between those who are disrupted and those who survive. The difference will be between those who are cannibalized because they are not seeing it coming, and they are not embracing it, and those who self-induce that cannibalization. […] So that is where I see changes happening now. If you think of Circle, and Ripple and all those – that is where they are active and helpful.”
Central Banks Are Ripple’s End Game
The relationship between the IMF and Ripple is a pointer to Ripple’s long game. The IMF really does not need remittance solutions but has Chris Larsen sitting on its advisory panel. Brad Garlinghouse, the Ripple CEO, has also just been at a Swiss National Bank (SNB) Conference consultative board meeting. Agustín Carstens, the Bank for International Settlements (BIS) General Manager, attended the meeting too.
The BIS owned by central banks, “fosters international monetary and financial cooperation, and serves as a bank for central banks.” Its services are for international organizations and central banks and is headquartered in Basel, Switzerland.
Notably, Brad was the only private sector representative in the meeting, and his talk on Ripple’s products made XRP enthusiasts beam with pride. Besides the BIS boss, Christine Lagarde, Norman Chan chairman of the Hong Kong Monetary Authority and the Central Bank of Russia governor Elvira Nabiúllina was in attendance. Other prominent attendees include the SAMA governor, Ahmed Abdulkarim, and IMF director Tobias Adrian.
XRP enthusiasts say that Christine Lagarde is selling Ripple’s solutions to the otherwise crypto bear, Agustín Carstens. It, nevertheless, seems to be working because Carstens was recently quoted calling blockchain, a powerful technology. Similarly, the European Central Bank in its paper on the implications of crypto assets on monetary policies and banking named XRP as a viable option to enhance liquidity and functionality in financial institutions.