Ripple Labs has partnered with global payments company Earthport, providing new channels for enterprise access to Ripple’s open-source transaction protocol.
Earthport specializes in cross-border payments, maintaining one of the largest open networks of its kind. The company’s payments hub features local clearing institutions and payments companies from 60 countries around the world. Additionally, Earthport works with major banking partners like Bank of America, Barclays and BBVA.
The partnership provides Ripple with access to a broader pool of potential customers, all of whom are required to comply with existing anti-money laundering and know-your-customer (AML/KYC) requirements in their respective jurisdictions. According to Ripple Labs, the partnership is another step in its continued focus on enterprise-level clients, especially those in the banking industry.
Earthport CEO Hank Uberoi said that at its heart, protocols like Ripple’s enable what he called “real time communication between the sender and the receiving party.” Uberoi went on to say that his company found Ripple compelling because of its potential to solve chronic issues in cross-border transaction channels that see high volumes.
He told CoinDesk:
“[Ripple] solves a problem that exists today, not necessarily 10 years out. It could gain acceptance today because they’re dealing with many currencies, not just with cryptocurrencies, and that’s important to us because we don’t want to create solutions for which there is no demand today, though there may be some in the future.”
Ripple Labs CEO Chris Larsen called the partnership “a watershed moment” for the company, adding that the move is crucial in its continuing bid for the banking industry to embrace distributed ledger systems.
Inroads into bank network
By connecting to Earthport’s cross-border payments hub, Ripple Labs gains access to a global network of compliant financial organizations.
During the past few months, the cryptocurrency startup has inked deals with US banks that, at the time, expressed interest in open-source transaction technologies because of the need for more cost-efficient access to global money channels.
Larsen said that the move gives institutions the ability to utilize the Ripple protocol through a fully compliant entry point, explaining:
“It’s brought a huge scale of opportunities. It’s great for our existing bank customers, it's great for the banks coming into the Earthport hub, and it accelerates our ability to bring more liquidity on for more and more market makers.”
“It really accelerates the growth of the protocol and the network,” he continued.
Adoption over the long-term
Because “banks move slowly,” according to Uberosi, the Earthport CEO sees adoption happening in stages, with institutions approaching technologies like the Ripple protocol based on the practical benefits to their operations.
Uberoi said that the joint work between the Ripple team and Earthport will make it easier for banks and payments companies, because the steps required to do so – particularly in the areas of compliance and access – will be a lesser-risk endeavour.
Uberoi told CoinDesk:
“People will start to realize that using this combined infrastructure, they can start addressing many needs and problems that exist in the current cross-border paradigm.”
“It will take a little bit of time,” he added.
Image via Shutterstock, Ripple Labs