In a recent report by Bank of America titled “Breaking New Ground: Harnessing Payments Innovation in APAC,” the role of Ripple Labs in the payments space in the Asia-Pacific (APAC) region has been acknowledged by the Bank of America. The report highlights the significance of blockchain technology in digitizing trade documentation and the potential of Ripple’s solutions in revolutionizing cross-border payments.
Ripple Is An “Exception”
Bank of America recognizes the transformative power of technology in facilitating real-time payments. APIs are the key driver of real-time payments adoption, according to the report, and have revolutionized connectivity as well as transaction processing for customers.
Es Venkat, Head of Treasury Products APAC at Bank of America, notes, “We’re already seeing Open Banking become a reality in EMEA, with the API mechanism being used to develop many new use cases.” According to Venkat, this transition to Open Banking and the use of APIs will enable rapid and informed decision making, allowing near real-time information flow to meet treasury needs.
While blockchain technology has played an important role in digitizing trade documents and smart contracts, its impact on cross-border payments has been limited compared to the prevailing dominance of SWIFT gpi, the report claims. “It [blockchain] is being used as a security measure for certain transactions, but it has not had the success that the previous hype suggested,” Venkat said.
However, Bank of America acknowledges Ripple’s potential as a “possible exception” within the cross-border payments space.
[B]ut in cross-border payments, the work of Ripple is a possible exception, its [blockchains] impact has been limited. The reason for this is the rapid emergence of SWIFT gpi as the favored solution for tracking and tracing cross-border payments.
Bank of America’s Relationship With Ripple
Ripple has been forging partnerships with numerous leading financial institutions globally, including SBI Holdings, the Saudi Arabian Monetary Authority, Banco Santander, Western Union, UAE Exchange, and American Express in recent years. But the company’s collaboration with Bank of America, in particular, has been the subject of much speculation over the years.
In April 2020, the partnership with the Bank of America was confirmed by Julie Harris, the Head of Global Banking at Bank of America, 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. She specifically mentioned Ripple, alongside Swift, as one of the bank’s key partners.
Moreover, rumors of a close relationship have persisted, with new hints surfacing regularly. For example, CEO Brad Garlinghouse reportedly said at the Ripple Swell 2022 conference that Bank of America would gain a competitive advantage by using Ripple’s On-Demand Liquidity (ODL) product once the ongoing litigation with the U.S. Securities and Exchange Commission (SEC) is resolved.
At press time, the XRP price was at $0.4701, holding above the 200-day EMA.
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