Federal Bank, one of India’s leading private sector banks, recently announced its intention to partner with Ripple (XRP). The reason for this groundbreaking move is to use Ripple’s technology to takes the cross-border payment services it offers to the next level. This ensures safe and secure money transfers for its customers.
The partnership became official when Senior Vice President Ripple Inc, Mr. John Mitchell, and Federal Bank MD & CEO, Mr. Shyam Srinivasan signed the partnership agreements on March 29th 2019. The bank wants to increase its business from the $1.5 billion in revenue reported in 2018 through expansion into blockchain technology as acknowledged by the bank’s head.
The XRP Partnership
On March 28th, an official letter confirming the partnership came from the bank. On this day also, the Federal Bank launched in the UAE two remittance platforms that would serve as payment conduits to India. This was to help non-resident Indians living in the UAE, send money through banks and exchange houses with ease. This happens through the recipient’s Virtual Payment Address.
The Effect of the Federal Bank and Ripple Merger
The Federal Bank has used blockchain solutions strategies for remittances to its over 8 million customer base. After the launch of its 2017-2018 annual report, its shares rose by 2%. However, it’s not the first Indian financial institution to work with Ripple. Previously, Axis Bank had Ripple power its real-time international payment service.
Ripple’s network of financial institutions, RippleNet, has over 200 partners in the Banking sector making use of Ripple’s technology. These financial institutions are worldwide including the Middle East. Europe, Africa, Asia, and the Americas. An example is in February, BankDhofar, the second largest bank in Oman, switched to RippleNet technology for cross-border remittances to India.
Dark Shadows with a Bright Future, a crypto report by Wiess, had Ripple leading the pack because of its penetration into the banking sector. This steady growth Ripple is experiencing hasn’t gone unnoticed by large corporations. SBI Holdings CEO Yoshitaka Kitao has gone on record saying that by 2021, most Japanese banks will be using Ripple (XRP). Banks are already making the jump to Ripple technology. For instance, the London-based Mercury FX, international payments firm, has transacted around $1.8 billion through Ripple.
Although the Federal Bank’s move into crypto is very beneficial to the finance sector, it has not been smooth sailing. Last year, the Reserve Bank of India (RBI) ordered a ban on any use of cryptocurrency by Indian financial institutions. Following the ban, a public outcry forced RBI to reconsider its stance on the matter.
Ripple and the SEC
Despite its success in the financial sector, Ripple is currently facing a serious legal battle with the SEC. The federal charges brought up against the crypto project might affect the future of XRP. The SEC alleges that over $1.3 billion of unregistered securities had been transacted using XRP tokens. Ripple’s board of executives have categorically denied any wrongdoing. The case has been ongoing since December 2020 and for now, everyone interested in XRP has to wait and see what the outcome of the case will be.
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