Market Today

PNC Financial Services Group Became the next Major Client of Ripple
Editorial Team

Ripple has just added PNC Financial Services Group to their list of clients that use their real-time cross-border settlement payments systems to facilitate the process of international payments.

PNC will use Ripple’s xCurrent system. This system utilizes Blockchain technology to quickly and cheaply process international payments, but it does not utilize cryptocurrency unlike Ripple’s xRapid system.

PNC’s decision to utilize Blockchain technology is in accordance with the general move of banks and financial institutions to switch to Blockchain to stay competitive.

Although Ripple is now the go-to company for Blockchain-based settlement systems, the competition is fierce especially from companies like IBM which recently unveiled their World Wire cross-border payment solution.

The new IBM product looks like Ripple’s. Their solutions, although, are executing on the Stellar Blockchain, which is similar to Ripple’s one. However, IBM’s product requires that financial institutions utilize cryptocurrencies of their choice to conduct the transfers and they do not currently offer a system to compete with Ripple’s xCurrent which is solely based on the Blockchain and not on cryptocurrency.

IBM describes the use of cryptocurrencies in their new system, saying:

“Two financial institutions transacting together agree to use a stable coin, central bank digital currency or another digital asset as the bridge asset between any two fiat currencies. The digital asset facilitates the trade and supplies important settlement instructions…World Wire then simultaneously converts the digital asset into the second fiat currency, completing the transaction. All transaction details are recorded onto an immutable Blockchain for clearing.”

Although many of Ripple’s clients use or are willing to use xCurrent product, the company is launching its xRapid product in the coming months hoping they switch from xCurrent to xRapid.

Ripple’s senior vice president for product management, Asheesh Birla, spoke about the use of xRapid, saying that “Banks aren’t going to be the first adopters of xRapid,” and further adding that xCurrent is “a way to get their toe into the water.”

Trials with xRapid from companies like Santander Bank, Money Gram, Western Union, and SBI Japan are being continued, but it is still unclear how many of these will use the product after its official launch.

According to Ripple’s head of regulatory relations for Asia-Pacific and the Middle East, the company has already signed on more than 120 banks and financial institutions to use their xCurrent system. It is unclear how the growing competition will affect the number of clients Ripple gains.