In a recent report titled “Breaking New Ground: Harnessing Payments Innovation in APAC,” Bank of America acknowledges the role of Ripple Labs in the payments space in the Asia-Pacific (APAC) region. The report emphasizes the importance of blockchain technology in digitizing trade documentation and highlights the potential of Ripple’s solutions in revolutionizing cross-border payments.
The report recognizes the transformative power of technology, particularly APIs, in facilitating real-time payments. It states that APIs have revolutionized connectivity and transaction processing for customers. Venkat, Head of Treasury Products APAC at Bank of America, explains that Open Banking has become a reality in EMEA, with APIs being used to develop new use cases. This transition to Open Banking and the utilization of APIs enables rapid and informed decision making, allowing for near real-time information flow to meet treasury needs.
However, the report points out that blockchain technology, despite playing a significant role in digitizing trade documents and smart contracts, has had limited impact on cross-border payments compared to the dominance of SWIFT gpi. Venkat states that blockchain has been used as a security measure for certain transactions but has not seen the success that was previously hyped. One possible exception to this limited impact is Ripple’s work in the cross-border payments space.
Ripple has been forming partnerships with leading financial institutions worldwide, including SBI Holdings, the Saudi Arabian Monetary Authority, Banco Santander, Western Union, UAE Exchange, and American Express. The partnership with Bank of America, in particular, has been a subject of speculation over the years. In April 2020, the Head of Global Banking at Bank of America, Julie Harris, confirmed the partnership during an episode of the bank’s “Treasury Insights” podcast. Harris stated that Bank of America aims to provide its customers with the ability to conduct transactions anytime and anywhere by integrating new solutions, mentioning Ripple and Swift as key partners.
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Rumors of a close relationship between Ripple and Bank of America have persisted, with new hints surfacing regularly. CEO Brad Garlinghouse reportedly mentioned at the Ripple Swell 2022 conference that Bank of America would gain a competitive advantage by utilizing Ripple’s On-Demand Liquidity (ODL) product once the ongoing litigation with the U.S. Securities and Exchange Commission (SEC) is resolved.
At the time of writing, the price of XRP, Ripple’s native cryptocurrency, was $0.4701, holding above the 200-day EMA.
In conclusion, Bank of America’s report acknowledges Ripple’s potential as a game-changer in the cross-border payments space. While blockchain technology has had limited success in this area, Ripple stands out as a possible exception. The partnership between Ripple and Bank of America is seen as significant, and rumors of a close relationship between the two entities persist. If the ongoing litigation with the SEC is resolved, Bank of America could gain a competitive advantage by utilizing Ripple’s innovative solutions like On-Demand Liquidity.
