IBM Continues Major US Banking Institution Probe, Begging the Question: “Is Ripple’s End Near?”
As per an all-new Bloomberg report released yesterday, Ripple might be faced with some serious competition since IBM has teamed up with a couple of major US-based banks in order to issue a new set of cryptocurrencies for them. Not only that, but the article also claims that IBM has created its very own remittance system (called ‘World Wire’) that could easily rival Ripple’s current tech offerings such as ‘RippleNet’.
At this point, it is also worth highlighting the fact that the above mentioned IBM initiative will be built atop the “Stellar ecosystem” — one of Ripple’s biggest competitors in the market today.
In regards to all of these developments, IBM’s head of blockchain Jesse Lund recently went on record to state that his company became interested in crypto after JP Morgan decided to release its very own stablecoin. With that being said, Lund did not reveal the names of the “two banks” that IBM has allegedly partnered up with.
It's official: IBM is open for business in payments with World Wire in 72 countries and 47 currencies. Support for stable coins and cryptos. Come see my keynote with @JedMcCaleb @Money2020 in Singapore this morning https://t.co/8XD3mgOhqN https://t.co/PMyc1X9KIH #IBMBlockchain pic.twitter.com/NMIgfZunuQ
— Jesse Lund (@jesselund) March 18, 2019
More On The Matter
As most of our readers probably remember, earlier this year JP Morgan shocked the global finance arena when it decided to go ahead and launch its very own cryptocurrency called the ‘JPMCoin’. The token’s value has been pegged to that price of USD and will be used by the bank to facilitate its internal transactions as well as reduce its transfer/remittance periods.
On the subject, Jesse went on to add
“We had received interest significant interest in regards to crypto on the heels of the JPM Coin release… It was only after this that the ‘two major banks’ reached out to us”
If all of this wasn't enough, the IBM executive also revealed that a total of six global banking entities had signed a letter of intent to use the firm’s blockchain network to issue their very own stablecoins. Some of these banks include:
- Brazil’s Banco Bradesco
- South Korea’s Bank Busan,
- Philippines-based RCBC
How Come None Of These Banks Considered Using Ripple’s Native Cross-Border Platforms?
After reading all of the information that has been presented above, it is quite natural that some of you will ask the question
“Why did none of these banks go to Ripple?”
— especially since the company’s primary goal (from the start) has been to help facilitate frictionless remittance payments as well as foster international transfers in a streamlined, hassle-free manner.
In this regard, a spokesperson for Ripple recently went on record to state that “convincing banks to trust a cryptocurrency that is not controlled by them (XRP) is the main issue”. He then added that banks “aren’t ready to relinquish control” and thus there are only a handful of payment providers that are currently making use of XRP to settle their payments and monetary transactions.
As predicted, banks are changing their tune on crypto. But this JPM project misses the point – introducing a closed network today is like launching AOL after Netscape’s IPO. 2 years later, and bank coins still aren’t the answer https://t.co/39EAiSJwAz https://t.co/e7t7iz7h21
— Brad Garlinghouse (@bgarlinghouse) February 14, 2019
Even though a bulk of the attention regarding the above mentioned case is being directed towards IBM, we should not overlook the role that Stellar will play in this new movement. As mentioned earlier, IBM’s Blockchain World Wire system will run exclusively on the Stellar blockchain ecosystem. Not only that, it will even make use of Stellar’s native crypto asset ‘Lumens [XLM]’ to settle some of its internal tx’s.
When asked about why his company decided to go with Stellar, Lund explained:
“Personally, I think cryptocurrencies could very well serve as a viable settlement instrument. We’ve started with Lumens, which is the native asset of the Stellar network, but we already have the capacity to introduce other cryptocurrencies that could include Bitcoin or Ether.”