A consortium of 47 banks has completed a distributed ledger technology (DLT) pilot that is now set to move to production in 2017.
Announced today by SBI Ripple Asia, Ripple's joint venture arm with Tokyo-based financial services firm SBI Holdings, the firms lauded the test as an example of how Ripple's technology could be leveraged by clients, even when not deployed on premise at each individual company.
Daiwa Next Bank, Mizuho Bank, Nomura Trust, Sumitomo Mitsui Trust and ORIX Bank were some of the banks involved in the trial. (A full list is available with the official press release.)
In interview, Patrick Griffin, executive vice president of business development at Ripple, framed this as a stark contrast to standard policies in place at banks in Europe and North America.
Griffin told CoinDesk:
"RC Cloud is a product that puts our enterprise solution in the cloud, allowing for banks in the region to use APIs to connect to the software and access to the solution without an install."
Griffin explained that the pilot showcases how banks could use Ripple's Connect product and its Interledger protocol to send transactions between each other, as well as any other bank running the software, both domestically and internationally.
As a result of the successful test, Griffin said some banks involved are now committed to moving to production deployment of the RC Cloud in 2017.
"Several banks are planning to go into production around Autumn," Emi Yoshikawa, director of joint venture partnerships at Ripple, added. "They will now begin discussing the rules and standards between banks."
Notably, while Ripple has emphasized the effectiveness of its payment solution in international context, Yoshikawa, whose job is to liaison with Ripple's partners in the Japanese market, cited the difficulties with domestic transactions as a motivating factor among participants.
"Domestic payments are actually very expensive, it's 5x to 10x more expensive than in the US," she said, citing issues with Japan's domestic ZenGin Net system, and the heavy use of cash by Japanese consumers.
Yoshikawa suggested just 19% of domestic transactions are cashless, a number in line with research from the Japan Consumer Credit Association, though research from MasterCard has put this number as high as 62%.
According to figures from SBI, SBI Ripple Asia is 60% owned by the bank and 40% owned by Ripple. SBI owns 11.2% of Ripple shares.
SBI has reported it saves 12.6 bps on international remittances when using Ripple's technology and its native asset XRP, earning a 60% cost reduction.
Connecting the blocks
Griffin went on to highlight how Ripple believes the project fits into its broader progress as a company, and its work with its wider network of banking partners.
Since launching in 2012, Ripple has faced competition from an increasing diversity of consortia, including the Linux Foundation-led Hyperledger project and banking consortium R3CEV.
However, Griffin contends that Ripple's approach, emphasizing "production" and a focus on specific use cases, is providing more value.
Ultimately, he argues that RC Cloud product, if deployed regionally, could plug into the work ongoing at its Global Payments Steering Group (GPSG), which Griffin framed as a direct competitor to the Swift network.
Asked about Swift's plans to modernize its system, Griffin offered a critical take.
"Ripple is a significant upgrade. Swift does not represent an innovation in the payment structure," he said, adding:
"We roll out product and Swift does not."
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple.
Japan city view via Shutterstock