MUFG Bank, Japan's Largest Bank, Exploring Ripple’s Technology for New Cross-Border Payment Service

Siamak Masnavi

On Friday (9 November 2018), MFUG Bank, the principal banking unit of Mitsubishi UFJ Financial Group (MUFG), the world's fifth largest bank (by total assets), announced the signing of a Memorandum of Understanding (MOU) with Banco Bradesco, one of the largest banks in Brazil, to collaborate on the development of a new cross-border payment service, using Ripple's technology, between Japan and Brazil.

MUFG Bank is Japan's largest bank. Its parent, MUFG, is headquartered in Tokyo, has over 360 years of history, and is one of the main companies of the Mitsubishi Group. As for Banco Bradesco, it was founded in 1943, and it is headquartered in the city of Osasco, in the metropolitan area of São Paulo.

Californian FinTech startup Ripple is one of the world's leading specialists in the area of cross-border payments solutions. RippleNet, its global payment network, connects banks and payment providers in order to provide "one frictionless experience for sending and receiving money globally."

Financial institutions joining RippleNet "can process their customers’ payments anywhere in the world instantly, reliably and cost-effectively." As cross-border payments solutions provider Ripple explained in a blog post on 21 September 2018, membership of the RippleNet network offers the following benefits:

Access: "Today, banks and providers overcome a fragmented global payments system by building multiple, custom transaction relationships with individual networks. By joining RippleNet’s single worldwide network of institutions, organizations gain a single point of access to a standardized, decentralized infrastructure for consistency across all global connections."

Certainty: "Legacy international payments cannot provide clarity around transaction timing or costs, and many transactions ultimately end in failure. RippleNet’s atomic pass-fail processing ensures greater certainty in delivery, and its bi-directional messaging capability provides unprecedented end-to-end transaction visibility for fees, delivery time and status."

Speed: "Disparate networks and rules create friction and bottlenecks that slow down a transaction. RippleNet’s pathfinding capabilities cut through the clutter by identifying optimal routes for transactions that then settle instantly. With RippleNet, banks and providers can reduce transaction times from days to mere seconds."

Savings: "Existing payment networks have high processing and liquidity provisioning costs that result in fees as high as $25 or $35 per transaction. RippleNet’s standardized rules and network-wide connectivity significantly lower processing costs. RippleNet also lowers liquidity provisioning costs or can eliminate the need for expensive nostro accounts altogether through the use its digital asset XRP for on-demand liquidity. The end result is a dramatically lower cost of transactions for providers and their customers."

MUFG's press release says that although "the relationship between MUFG Bank and Bradesco dates back to 1973 when an MUFG Bank predecessor bank invested in the Brazilian financial institution," the MOU is "an extension of an existing September 2017 collaboration agreement between MUFG Bank and Bradesco, and represents the banks’ most recent business engagement." 

Over on Twitter, "CryptoEri", a very popular Tokyo-based cypto reporter/analyst with a YouTube channel that is one of the best sources of Ripple-related news, had the best reaction to this announcement:

 

Featured Image Courtesy of Ripple

CoinBits Allows Users to Earn Passively By Converting, Saving Change in Bitcoin

Erik Finman, an early Bitcoin ( BTC ) adopter, has launched a crypto platform called CoinBits, which allows investors to passively invest in the flaghship cryptocurrency.

According to TechCrunch , Finman’s new app, CoinBits, intends to democratize access to cryptocurrency by allowing people from all walks of life to make small investments through commonly-used investment and savings strategies. These reportedly include roundups on transactions made via credit or debit card purchases.

The CoinBits app will also support conversion of fiat currency to bitcoin via regular transactions from users’ checking or savings accounts. While CoinBits has been designed to mainly benefit its users, Finman revealed that his own BTC holdings will also grow as more people use the small savings app.

No Commissions on Transactions, 98% of Bitcoins Stored Offline

As explained on CoinBits’ official website, users can invest small amounts such as $10, $25, $50, or $100 through the app’s web-based interface. The savings app also lets users adjust the risk level for their investments.

Notably, the CoinBits app does not charge transaction fees and 98% of users’ bitcoins are kept securely in cold storage (offline).

Explaining how investing in cryptocurrencies can be challenging for some people, due to their highly technical nature, Finman said:

Overall, investing in bitcoin is complicated and can feel almost impossible. CoinBits allows you to put that spare change in bitcoin. For example, if you spend $1.75 on French fries, that remaining 25 cents is invested automatically.

As noted on CoinBits’ website, the company handles withdrawals and users are charged a $0.50 fee for same-day processing. There’s also an option to download the transaction history associated with users’ accounts. This makes it easier for users to manage their finances and track how much they may have gained or lost on their bitcoin investments.

Crypto-Backed Lender Receives $25 Million in Deposits Two Weeks After Launch

As the crypto and blockchain ecosystem continues to evolve, many new startups have been offering different products and services which allow users to earn passively on their digital asset holdings. In March 2019, BlockFi Lending LLC, a New York-based “secure non-bank lender” announced it had received $25 million in cryptocurrency deposits just two weeks after launching its crypto-backed loans packages.

BlockFi’s investment packages allow users to earn interest on their Bitcoin (BTC) and Ether (ETH) investments.