Ripple is targeting the Chinese market with its distributed ledger technology designed to speed up cross-border payments, an executive at the firm told CNBC.
“China is definitely of interest, it is definitely a target,” Jeremy Light, vice president of European Union strategic accounts at Ripple, told CNBC in a phone interview. “China is definitely a country and region of interest.”
Earlier this year, the blockchain company struck a deal with Hong Kong-based financial services firm LianLian International, aimed at powering the latter’s cross-border transactions between China, the U.S. and Europe. It is not clear whether Ripple’s technology is being deployed by LianLian yet.
Blockchain, also known as distributed ledger, is the technology that underpins cryptocurrencies like bitcoin. It records transactions across multiple locations, rather than one centralized server. Ripple’s distributed ledger technology is different to bitcoin’s, however, as transactions are validated by a network of independent servers — owned by banks, retailers and traders — rather than the “miners” that validate transactions on bitcoin’s public blockchain network.
Ripple’s focus on China would unlikely be on advancing the adoption of its cryptocurrency, XRP, as Beijing has clamped down on the trading of virtual currencies. China last year banned initial coin offerings (ICOs), a controversial means of financial technology start-ups raising funds through the sale of new digital tokens.
Ripple currently has more than 100 financial institutions signed up to its network, including Santander, UniCredit, UBS and Standard Chartered. But with just one Chinese client, the firm has a long way to go before making waves in the country. China is home to a number of large fintech (financial technology) firms, with payment apps like Ant Financial’s Alipay and Tencent’s WeChat Pay proving popular with Chinese consumers.
Elsewhere in Asia, Ripple has created an app called Money Tap in Japan, in partnership with 61 domestic lenders. The app is designed to allow banks to settle round-the-clock payments in the country.
Most banks and financial firms are uninterested in the cryptocurrency side of Ripple’s offering, however. Ripple is mostly known for its digital token, which is used to essentially bridge payments from one currency to another.
Instead, lenders have sealed deals with the start-up to use its xCurrent product, which is aimed at settling payments instantly around the world.
Ripple’s xRapid platform meanwhile — where XRP is used — has seen interest from money transfer firms including MoneyGram and Western Union. Both uses of the cryptocurrency are in trial phase rather than commercial deployment.
But there are fears the volatility of cryptocurrencies could inhibit Ripple’s XRP from seeing mainstream adoption with banks and other financial institutions. Ripple saw its cryptocurrency soar to unprecedented levels last year, notching a record high of $3.81 — and a market value of $147 billion — on January 4, according industry website CoinMarketCap. It has since receded to just 29 cents, a decrease of more than 90 percent.
