Sunday, March 24, 2019

TransferWise CEO: No Blockchain Until More Banks Adopt Ripple

Despite the adoption of Ripple (XRP) by several banks and even countries for cross-border payments, some firms think that blockchain technology is not yet convincing enough to be used in the line of business. TransferWise, a major money transfer service, is one of them.

While speaking to fortune recently, the CEO and co-founder of TransferWise, Taavet Hinrikus, quantified that although the blockchain offers several positive potentials, using the blockchain in the line of operations could create new problems with the adoption of the technology.

Cryptocurrency Doesn’t Offer Much in Terms of Change to Banks- Taavet

The interview with the CEO was held on Fortune’s new episode, “Balancing the Ledger,” and the co-founder detailed that TransferWise supports blockchain-based transfers mainly because of its concept, but the blockchain brings about complications along with its adoption, at least for now. TransferWise processes international payments at high speed, all for a low commission, and sees little utility in the blockchain technology in the coming years. He stated that;

“We’ve heard this dream many times from different people. However if you start digging into it, you realize that it may look great on paper, but in reality, to make use of it, it’s really hard. We’ve looked at different blockchain technologies, but yet we haven’t found anything which enables us to do what we do in a way that is cheaper or faster.”

FinTech companies have been looking for a new solution to replace the SWIFT network, which charges a relatively high commission, and it is looking less likely that the blockchain will be the answer to their existing woes. FinTech companies that want to implement the blockchain now require major upside to make sure the switch will be a better one, according to the CEO.

Ripple On CoinField

The CEO also spoke on the solution Ripple provides with its international payments solutions, RippleNet and said that it was not any different from existing global payment solutions. He further stated that the adoption of Ripple’s solution by banks is very low, and if Ripple was to be majorly adopted in the banking industry, with a big-time solution to relatively increasing speed and massively reducing cost, they could adopt the technology.

It had previously been reported that the Western Union CEO, Hikmet Ersek, did not show any interest in switching over to Ripple’s technology after the company carried out a trial run. Ersek, in the same manner as Hinrikus, noted that the trial did not show much promise in terms to saving costs that would convince most using the existing system to switch over to Ripple for cross-border payment solutions.

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