The official blog of the leading blockchain remittance firm, Ripple, has released a new conversational piece on its CEO, Brad Garlinghouse’s discussion with Ross Leckow, Deputy General Counsel, International Monetary Fund [IMF]. Here, the Ripple chief responded to Leckow’s question of “How cross-border payments in the ASEAN region are of a great use case for blockchain?”
Garlinghouse explained that the ASEAN region is facing many difficulties in cross-border payments in terms of the transaction duration, the expensive costs and lack of transparency in transaction settlements. The reason why this region is witnessing such issues is majorly due to its exclusion for the correspondent banking network, he stated.
The CEO further mentioned Siam Commercial Bank [SCB] as one of the highlighted players in the finance industry to address these issues and act aggressively to introduce reforms. He also talked about SCB’s efforts to include digital assets and the blockchain technology in solving the existing problems. He added:
“SCB now serves as a next-generation hub, a regional clearing partner on the network, to improve connectivity and coverage across these underserved areas. The bank is also able to make payments into the region faster with lower costs and greater transparency.”
Next, he discussed the problems associated with bringing liquidity into cross-border payments, which, according to Garlinghouse can be solved by using digital assets and blockchain. He also spoke about the inactive money sitting around the world in nostro accounts to pre-fund cross-border transactions.
Garlinghouse believes that his company can assist the world with blockchain to eliminate this requirement for pre-funded accounts and add efficiency. In his words:
“Today, approximately $10 trillion sits parked around the world in pre-funded accounts to enable these transfers. By unlocking this capital, Ripple is helping to accelerate the global engine of commerce in a way that’s good for corporations and consumers throughout the region, and around the world.”
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