Ripple, Blockchain-based Solutions Could Revolutionize Remittances: Report

John Medley

A recently published report has found that blockchain-based money transfers are 388 times faster and 127 cheaper than those of legacy financial systems. The stats are even more impressive when we look at Ripple’s transaction speeds and fees.

The report, published by BlockData, reveals that blockchain-based solutions are great for remittance payments. Through a sample of 1,800 remittance payments, BlockData found that Ripple, BitShares, and Stellar could turn the industry around.

Its data shows that while legacy systems take anywhere between two and five days to settle transactions and charge fees that could grow to nearly $10, blockchain-based solutions are able to process these same transactions in as little as two seconds, for less than $0.01, as is Ripple’s case.

Different oslutions on remittance payments

Moreover, Ripple’s technology is able to settle transactions in about four seconds, while remittance giant Western Union needs three to five days to do so. This means that Ripple could settle up to 100,000 transactions in the time Western Union settles one.

BlockData’s report added that it found the number of remittance companies using blockchain technology has been growing steadily over the last 10 years. Most of these, the report adds, don’t use their own blockchain or blockchain-based token, but rely on solutions provided by existing blockchains like that of Ripple.

Our results show that about two-thirds of these startups utilize blockchain technology without their own token. Most of these companies are building on existing blockchain infrastructure like RippleNet or Stellar

The firm’s research also found that traditional remittance firms like MoneyGram and Western Union have been experimenting Ripple’s proprietary service, xCurrent, to settle cross-border payments using blockchain technology. Santander has recently confirmed it’s doing the same thing through its One Pay FX app.

Ripple may be facing competition in the future, however, as some have claimed Facebook’s upcoming cryptocurrency could be used for remittance payments as well. The difference made by blockchain-based solutions is, nevertheless, astounding.

Remittance Industry Struggles

In favor of Ripple’s crusade to revolutionize the remittance industry are various other factors. Firms like Western Union need days and huge fees to process transactions as they often have to go through various middlemen.

Moreover, financial regulations – often related to anti-money laundering (AML) checks – forces these firms to navigate complex bureaucracy to process the payments in a legal way. An immutable blockchain is able to help firms speed everything up.

Despite these difficulties the industry is growing. Available data shows that firms like TransferWise have seen their millions of users transact billions per month, and still make a profit. BlockData’s report reinforces that the industry will keep on growing.

The global remittance industry is projected to hit $1 trillion by 2022 and $1.4 trillion by 2025.

The industry’s growth, nonetheless, is being accompanied by Ripple and its blockchain-based solutions. The company’s chief strategist has claimed the XRP token itself – which Santander clarified it hasn’t been using – is “being used more than bitcoin.”

The company’s growth has made its presence felt in the financial industry, so much so that Ripple’s CEO Brad Garlinghouse has clashed with the CEO of SWIFT Gottfried Leibbrandt in a debate in Paris.

OKEx Announces OKChain Hackathon to Boost Development of Decentralized Applications

Popular bitcoin exchange OKEx has announced the launch of an OKChain Hackathon in a bid to promote the creation of decentralization applications in the blockchain network’s community.

According to a post published on OKEx’s website, OKChain’s code has already been uploaded to GitHub in April, making it open-source while the first exchange to launch a public blockchain hasn’t done so yet, the post adds.

Participation in the OKChain Hackathon is open until July 20 of this year, and the event’s winners could receive up to $5,000 in OKB as a reward. The hackathon will see developers from across the world develop products and services on OKChain, including Software Development Kits (SKDs), market computing plugins, delegator service products, and staking service products.

The announcement details OKChain launched its 0.1 version in May, disclosing validator selection and its dividend mechanism at the time, and becoming the first blockchain developed by a cryptocurrency exchange supporting the access of third-party institutions.

Commenting on OKChain’s development, OKEx CEO Jay Hao said:

Adhering to the original spirit of blockchain, OKChain won’t become an extension of the exchange, but an independent ecology. We are looking forward to co-constructing an open, decentralized, practical, and diverse ecosystem with our global users.

Hao added that users can now use the blockchain’s voting mechanism, develop their own decentralized exchange or decentralized applications, and more using OKChain’s testnet. OKChain’s mainnet, according to the announcement, is expected to soon launch.

Ahead of the launch OKEx gave OKChain network participants more autonomy and changed the source code so that no entity, including OKEx, is able to control or manipulate the blockchain. Users running decentralized applications can, per the post, add and remove trading pairs without any type of permission from the exchange or any other entity.

Holders of OKChain’s native OKT token can stake their token to become a so-called “Ordinary voter,” allowing them to vote for validators on the network, or delegate their voting power to another account. A total of 21 validators are set to be elected.

OKChain’s OKT is an inflationary token as according to OKEx, a deflationary model – the one used on other blockchains developed by exchanges – “exacerbates the conflict of interest between users and hodlers.” This, as hodlers want the token’s price to increase, which could also lead to a rise in fee, which in turn see users move to other cheaper platforms.

Node operators on the blockchain, OKEx concludes, stand to receive various benefits, including rewards from block generation, voting rewards, and more without having to pay for servers and technology.

Featured image via Pixabay.