Despite the Reserved Bank Of India banning all cryptocurrency activities in the country. Ripple, a blockchain company, has partnered with Kotak Mahindra, a leading banking institution in India with over 1,300 branches around the country. The ban was meant to prevent banks from any dealings with cryptocurrency as well as depositing of fiats to exchanges. It is the social standing of the bank that makes it suitable for RippleNet network’s Xcurrent. The Xcurrent platform is advantageous to banks because it enables the institution to message and settle transactions faster, securely and in a transparent manner.
The deal comes after widespread awareness of cryptocurrency in India. The number of banks has grown, with a sizeable percentage of Indians having a bank account. $69 Billion was the amount remitted into the country by Indians in 2017. All these factors make it ideal for a wise banking institution to partner with Ripple. The interledger protocol, which is part of Ripple’s centralized blockchain enables simplified remittance of fiat currency while the RippleNet network enables ease of cross-border remittance.
There are a number of other banks that have also partnered with Ripple to benefit from the Xcurrent. Some of these include Standard Chartered and Axis bank. Xcurrent enables the banks to leverage their services for faster and cheaper cross-border transactions. Institutions can, therefore, make spontaneous remittance to a country through the software. The network has one advantage to the banks. As a result, they could make broader markets through the system.
Possibility Of RBI Ban Reversal
The RBI recently put up a panel to research on the possible development of a Central Bank digital currency. Even though the RBI has banned all such doings, there is a gleam for hope for the government to rescind the ban. Ripple is sure of the base norms and the Financial regulator’s panel report on cryptocurrency. Cryptocurrency traders have also appealed to RBI to reconsider the ban. Some of the exchanges, as well as stakeholders affected by the ban, have also approached the government for talks to lift up the ban. The RBI also admitted to had been allegations of not researching well on the matter before hitting the ban hammer. Another shimmer of hope lies with the Basel norms, which state that a bank should have a backup remittance system with a different technology apart from the primary backup remittance system. It means that Xcurrent could be the back technology for most if not all banks.
XRP and Its Win-Win Situation with Remittance
Two countries with low liquidity between their currency pairs would find it difficult to transact. India’s currency liquidity is average, and the remittance wouldn’t be a problem to it. However, in the case of two low liquidity currency pairs, XRP could enable the financial institution to facilitate transactions between such currencies.
RippleNet remains a very promising blockchain. The XRP market capitalization has however faced a downward trend since the start of June. The cryptocurrency is, however, the third largest crypto coin in the world and its financial institution is leveraging services could be its pathway to success.