Germany’s DZ Bank AG is Exploring Blockchain Use with Ripple’s Interledger Protocol

DZ Bank AG Thinking Of Integrating Ripple Interledger Protocol

Blockchain as a technology has been having a major breakthrough in 2018, especially in the banking sector. Some studies point out that with blockchain integration by the banks, will result in greater saving and faster transactions. The banks will enjoy cost reductions not only in their payment processing as well as agreement alongside compliance and treasury operations.

Germany's DZ bank, which is the country’s second-largest bank by asset size is planning to head down the blockchain road. Concerning potential Ripple Interledger protocol integration, the bank has listed a couple of slides in their recent report“blockchain(s) and potential impacts on reconciliation.” It is not rocket science to what that may mean just because the protocol is all about cross-border transactions.


Transactions would be made easy and undoubtedly faster than what users over there enjoy now. Specifically, the Ripple blockchain technology will rewire the world’s financial system improving the cost, without any doubt, alongside the speed of the transactions.

Just like any other sensitive sector, integrating something new into the banking system without testing can be a grave mistake. Where it gets pretty interesting is that there is another partner of Ripple (XRP) in Frankfurt – ReiseBank.

The point probably is that DZ bank let their subsidiary-ReiseBank, take all the risks of testing Ripple Interledger Protocol and waited for the results. And perhaps if these results are conclusive, then DZ can go ahead and implement Ripple without taking any risk as well as wasting time doing the tests.

Ripple’s Interledger Protocol

The Interledger Protocol provides for routing payments across different digital asset ledgers while isolating senders and receivers from the risk of intermediary failures. Secure multi-hop payments and automatic routing enable a global network of networks for different types of value that can connect any sender with any receiver. It is intentionally limited in scope to provide the functions necessary to deliver a payment from a source to a destination over an interconnected system of ledgers. It includes minimum requirements for underlying ledgers and it does not include public key infrastructure, identity, liquidity management, or other services commonly found in payment protocols.

This protocol is called on by hosts through higher level protocol modules in an interledger environment. Interledger protocol modules call on local ledger protocols to carry the interledger payment to the next connector or destination account.

In the Ripple case, for example, the interledger module would call on a local ledger module which would create a Ripple transaction with the interledger packet attached to transmit to the Ripple Consensus Ledger. The Ripple address would be derived from the interledger address by the local ledger interface and would be the address of some account in the Ripple network, which might belong to a connector to other ledgers.

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