A collection of banks have formed what is being called the world’s first interbank group for global payments using blockchain technology. This is Ripple’s distributed ledger technology, specifically, because evidently no one at that company sleeps.
“Six of the biggest banks in the world are saying, ‘hey, we’re dong this, we believe in this,’” says Marcus Treacher, Global Head of Strategic Accounts at Ripple. “This is the signal that [blockchain] technology is coming to life.”
The banks in question include founding members Bank of America Merrill Lynch, Santander, UniCredit, Westpac Banking Corporation, and the Royal Bank of Canada, among others, a collection kept small to begin with but, as Treacher points out, having a huge collection of banks to start runs the risk of nothing actually getting done.
The group’s job will be to work with Ripple to ease settlement issues, by overseeing creation and maintenance of things like Ripple’s transaction rules, as well as other standards that need to be formalized to make sure that Ripple’s payment capabilities are implemented across a global scale.
“We’ve kept in these six, formed [the GPSG] together in such a way that we have access to all of the world’s pay points,” says Treacher. “Just having the technology without agreeing on rules is a very hard thing.”
The banks who agree on these standards will be able to benefit customers in use cases such as if a customer sends money from Santander to UniCredit, for example, and then changes his mind.
Having rules in place that the banks have already agreed upon for this instance is a subtle but huge thing, similar to the way the rules of the road work, according to Treacher—he is British, though, so maybe not the best metaphor to choose (yes, it is the wrong side, the rest of Europe even agrees, and also, just saying, London taxi rides).
The creation of a body such as the GPSG will reportedly allow settlement of payments to occur faster over a global network, allowing blockchain technology like Ripple’s to reach more people and to more quickly change the world of payments.
Eventually, according to Treacher, the company would like to expand this network to all of the banks that use Ripple, a client list that includes fifteen of the world’s top fifty banks as BI reported earlier this month.
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