While adoption of bitcoin as a low-cost online payment method has disappointed after early optimism, the technology that underlies it—the blockchain—has become an area of high interest and investment in payments. Recently, Ripple, a payment network using distributed ledger technology to perform faster cross-border payments, and six of the largest banks around the world announced the launch of an organization that will advance blockchain-based payments. Along with Bank of America, Royal Bank of Canada, Santander, Standard Chartered, UniCredit and Westpac, Ripple announced the formation of the Global Payments Steering Group (GPSG).
“Today, people expect money to move at the speed of the Internet. That’s why we’re working with these top banks to address the need for faster cross-border payments,” said Ripple CEO and co-founder Chris Larsen. “The work of GPSG, a new global interbank network, will give financial institutions and their customers the ability to make new types of payments at mass scale.”
The GPSG will oversee the creation and maintenance of Ripple payment transaction rules, formalized standards for activity using Ripple and other actions to support the implementation of Ripple payment capabilities. The banks said the goal of their involvement is to drastically reduce the time and cost of settlement while enabling new types of high-volume, low-value global transactions. While they said they understand the potential to improve cross-border payments, the lessons of bitcoin are top of mind, according to Julio Faura, head of R&D at Santander.
“It’s time for banks to push on and move from discussing the potential benefits of blockchain, to making them a reality,” Faura said. “As ever, the devil is in the details. We are joining the GPSG in order to contribute to the definition of the standards and processes which the industry now needs in order to move ahead and build better payments networks.”