It may take some time for cryptocurrency to be regulated in India but the blockchain technology is already here. After ICICI Bank and State Bank Of India has already trusted themselves on blockchain technology, India’s third-largest private sector bank Axis Bank has also joined them. Usually, it takes three to four days to complete cross-border payments in India, which would be reduced to mere 5-10 seconds now with the recently launched instant international payment services that run on the enterprise blockchain technology solution from Ripple, Axis Bank aims to make international transactions more straightforward and more comfortable for all its customers. This service has been launched for its retail customers in India to receive payments from UAE while its corporate customers in India can accept payments in Singapore.
Himadri Chatterjee commenting on the blockchain based network, President, Transaction Banking, Axis Bank, stated, “While there have been significant innovations in domestic payments, cross-border remittance has seen negligible developments. Using distributed ledger technology and APIs, there is a possibility to change the way international payments are handled radically. We are excited with the potential the technology has to bring innovative services to the market and help us enhance value to our customers.”
Ripple makes international payments faster and more transparent for customers while also making sure that it is secured and with improved efficiency through the power of blockchain. The transfers reach their destination account in a matter of minutes, with the certainty of payment, and with a crystal clear transparency over the course of the transaction.
The real-time gross settlement system (RTGS) developed by Ripple is a currency exchange and remittance network. It is also called the Ripple Transaction Protocol (RTXP), or Ripple protocol and it has been developed upon a distributed open source Internet protocol, consensus ledger and native cryptocurrency called XRP.
Indian Banks And Blockchain:
The number of Indian Banks turning to blockchain for payment services is increasing every day. In October last year, ICICI Bank announced that it had completed transactions in international trade finance and remittance with the help of blockchain technology in partnership with Emirates NBD (banking group in the Middle East), thus becoming the first bank in the country and among the first few globally to do so. This was followed up by YES Bank under which it used the technology for vendor financing. Recently, State Bank of India ( SBI) announced plans to launch blockchain-enabled smart contracts and Know Your Customers (KYC) by next month. The development comes as a part of BankChain projects.
Axis Bank-Ripple’s Blockchain Partnership:
Ripple uses a blockchain for operating as it is a real-time gross settlement system (RTGS), currency exchange and remittance network. They are built on open source Internet protocol, consensus ledger and native cryptocurrency called XRP (ripples). Under their partnership with Axis Bank in India, Ripple will activate immediate cross-border money transfer, which will take only 5-10 seconds, compared to 3-4 days which is the norm right now.
Axis Bank will cover anyone based in UAE and Singapore to easily transfer money into India, with the help of the blockchain foundation by Ripple.
Axis Bank has partnered with Rakbank from Dubai, and in Singapore, they have teamed up with Standard Chartered Bank. However, these partnerships are limited by some ground rules, and they are:
Anyone in Dubai can instantly send money through Rakbank to only Axis Bank’s retail customers in India; meanwhile, anyone in Singapore can immediately send money to Axis Bank’s corporate customers in India through Standard Chartered Bank.