Two major Australian banks have joined the Commonwealth Bank of Australia for trialling Ripple payments which has been developed by US-based company Ripple Labs. A dry run is being conducted by Westpac Banking Corporation and the Australia and New Zealand Banking Group.
At present, Westpac is trailing Ripple by making low-value international payments to two other countries. ANZ Bank is yet to start the dry run. ANZ and Westpac are looking to use the Ripple’s platform for tracking customer payments, whereas Commonwealth Bank’s intention is to use Ripple for payment settlements between its subsidiaries.
The news comes a week after Commonwealth Bank announced its trial plans related to Ripple payments.
"The solution we've developed is faster than other alternatives in the market today, providing same or next-day payment. This technology could be very beneficial to all Australians, providing a low-cost and fast method of sending low-value payments overseas," Ms. Slade said to The Australian Financial Review.
It’s a great opportunity for Ripple to extend the use of its Ripple protocol, based on the bitcoin blockchain, into mainstream financial institutions. Moreover, after the trial with the top banks of Australia, Ripple is stated to become a more familiar name in the Australian payments system.
The two large banks in the Australia have made a strong statement about bitcoins. Senior executives from both these banks said that they did not have an interest in entering the bitcoin space, due to “regulatory concerns.” Commonwealth, on the other hand, has embraced bitcoin.
The Ripple network uses similar blockchain-style technology to bitcoin, which it calls a ledger, but is a distributed network rather than a decentralised one. Unlike the blockchain, which requires bitcoin as its token, Ripple allows any currency to be used across it, and allows transactions in all kinds of currencies – one of the prime reasons it's attractive to banks or remittance providers.
Although Ripple is often put in the same league with bitcoin, Ripple is actually substantially different from bitcoin.
The San Francisco-based Ripple Labs is backed by multiple investors that include Crypto Currency Partners, RRE Ventures, Route 66 Ventures, Core Innovation Capital, Bitcoin Opportunity Fund, China Rock Capital, Camp One Ventures, Google Ventures, IDG Capital Partners and others. The company has raised $34.4 million in funding.