Ripple made headlines last week as the cryptocurrency surged above $1.00 for the first time in its history. XRP started 2017 worth about one cent and is now at a dollar. Banks in Japan and South Korea are testing the use of Ripple’s technology for fast transactions. On Tuesday, Japanese banking giant, SBI Holdings, and several large credit card companies announced plans to form an association where participants share transaction history and verify each other’s payments — using the Ripple blockchain.
Credit card giants
JCB, Sumitomo Mitsui Card, Credit Saison among other major card companies will participate. Well-known for its close dealings with traditional financial institutions, Ripple, and its underlying technology may help drive down costs as well as curb fraudulent activity.
Ripple has positioned itself well in the cryptocurrency landscape by offering financial institutions faster, and less expensive transactions. Its value, however, is largely dependent on it becoming a service that banks want to use.
Starting in January, SBI Ripple Asia and JCB along with ten other cards will begin testing blockchain and artificial intelligence. Card companies will likely use blockchain technology primarily for identity verification, as well as sharing and stopping fraudulent transactions.
In addition, the card companies hinted at issuing their own blockchain-based virtual currency, likely to further streamline transactions. However, Ripple is far more technologically advanced than many bank-issued tokens. Their niche and lucrative partnerships place XRP in a good position to revolutionize the financial industry.
SBI Ripple Asia has already launched a federation of sixty-one banks and has started testing blockchain payments between the institutions. The move paves the way for greater use of blockchain technologies in the industry and could mean cheaper fund transfers.
Ripple’s close relationship to financial giants may drive the price of XRP higher as more banks choose to use the coin for their day-to-day business activities.