How Big Of A Role Does Regulatory Confusion And Uncertainty Play In The Willingness Of Banks To Use xRapid?
Banking institutions are simply not using xRapid right now. A post on Twitter by user Steven Diep (@DiepSanh) brought this issue to light with a video of Marjan Delatinne of Ripple’s Global Head of Banking from November 18th, though his post is dated for this morning.
Referencing the speech, the Twitter user wrote,
“Due to regulation uncertainty, NO banking institutions are using xRapid as of now, ONLY payment service providers.”
Offering dept to these statements in the video, Delatinne explains that xRapid is currently live, and “no banking institution is using that because, as you probably heard about it, the regulatory framework around the usage of digital assets is not very clear for banks. But payment service providers and some other financial institutions are least governed by these obligations.”
As stated above, banks around the world have to abide by specific regulations and laws that the jurisdictions determine. However, until the Global Central Banks and the governments around the world establish something certain and clear for digital assets, xRapid faces a fate that only includes payment service providers, at best, which stifles their progress. These types of providers are typically only used in remittance. Still there’s a chance for these banks to establish their own digital currency, which would let them perform the cross-border transactions that Ripple is founded in.
XRP is xRapid’s source of liquidity whenever these types of transactions are performed. The use of crypto makes it easier to reduce costs that traditional payments of this sort would often incur. The transactions are much faster, taking up to three minutes. However, the same transaction with SWIFT involving fiat currency is more likely to take about two or three days.
In the meantime, as banks around the world work on the regulations involving crypto assets and banks, xRapid is presently offering services to three financial institutions that have accepted their service. Those institutions include Cuallix, Catalyst Corporate Federal Credit Union, and Mercury FX.