Ripple attended a UK parliament hearing on Digital Currency yesterday where it defended digital currencies. Ripple was present to field questions on the benefits of blockchain and cryptocurrency and the debate offered a neutral view on digital currencies. The only thing that the panel agreed on is that blockchain in industry and cryptocurrencies have a great difference.
The Director of Regulatory Relations at Ripple, Ryan Zagone justified to the panel of how their project can better the transparency and efficiency of cross-border payments specifically between banks. This will generate cost savings up to 60%.
The current drawbacks of international remittance as explained by Mr. Zagone:
“You can literally mail a box of cash and have better tracking and certainty that you could be sending a payment through a bank.”
Ripple had earlier stepped up seeking a structured regulatory framework from the government of UK following Japan’s trails. Ripple is now in the news as it puts on the defensive at the UK parliament blockchain hearing. As a response to Zagone’s explanation, Mr. Martin Walker, the Director for Banking and Finance at the Centre for Evidence-based Management questioned Ripple use as an interbank payment service, citing its extreme volatility.
XRP is exposed to banks for remittances which are only for 3 to 4 seconds reducing the risk of volatility exposure to low and manageable levels, says Zagone. Ripple has signed over 120 financial institutions to date and as they have been mentioning, they are expecting a few more within this year.
Mr. Walker took a critical stance on cryptocurrency and blockchain as he split innovation into three, The good, the bad and the ugly:
- Good – the most underfunded but promising
- Bad – most ICOs and cryptocurrencies
- Ugly – companies suffering from the Blockchain Fad
One of the questionnaires said to Mr. Walker that he was being very negative after his dismissal of blockchain use cases for healthcare and housing registry. As he tried to explain that Blockchain is a big-time FAD and a distraction from real innovation in the banking sector which has contributed very little or nothing at all.
Zagone cited the capability for money transfer as a core benefit of the company’s technology, during his testimony. To which, Walker argued that Ripple, the company offers a model which is little more than the existing SWIFT messaging system.
“The difficulty in tracking payments is getting the people involved in the payments to actually upload the status. So simply having a blockchain doesn’t actually get people to update the status of where the payment is.”
Similarly, he criticized Ripple pilot projects that have announced to use XRP as a bridge between two currencies in an international transaction.
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