The chief cryptographer of Ripple, an alternative cryptocurrency designed to make remittances, declared today that banks will not move their across borders operations to their blockchain due to privacy and scalability concerns. He declared this in an interview, according to an article published by Reuters.
Ripple has had a certain amount of success scoring partnerships with several banks to use their technology to facilitate remittances all over the world. But the technology adopted by these banks and promoted by Ripple does not use blockchain as it is. This technology, called xCurrent, just uses the Ripple system to send messages to facilitate the payments conciliation.
The real system that uses XRP, the Ripple token, has yet to be adopted by any major organizations, due to many different factors. David Schwartz, the chief cryptographer declared about the subject, saying:
“WHAT WE HEAR FROM MANY OF OUR CUSTOMERS IS THAT IT’S IMPERATIVE TO KEEP THEIR TRANSACTIONS PRIVATE, PROCESS THOUSANDS EVERY SECOND, AND ACCOMMODATE EVERY TYPE OF CURRENCY AND ASSET IMAGINABLE. I WILL CONCEDE, WE HAVEN’T GOTTEN THERE YET”
The privacy concerns have to do with how blockchain deals with transactions in a semi-private manner, that is, there are registered forever in the ledger available for all eyes to see if they know your wallet address. For some clients, this is just unacceptable. And the scalability issues refer to the number of operations supported by the network, although Ripple advertises that it can scale to match the number of transactions of the VISA network.
These declarations seem like a response to an interview made yesterday to the CEO of Western Union, Hikmet Ersek, where he declared that after running a remittance test pilot program with Ripple, they had not seen the level of costs saving and efficiency that they had hoped to see, and that currently, they see no benefits of changing platforms.