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Western Union confirm experiments with Ripple for Money transfers

Feb 19, 2018 Posted /  2049 Views

Western Union confirm experiments with Ripple for Money transfers

Since beginning Ripple had been boasting of its collaborations with bigger banks and now Western Union could be added to its growing list. The Ripple blockchain is all set to become the go-to blockchain service for all the international money transfers. In the analysts round last week, CEO of Western Union, Hikmet Ersek, told the investigators that the Money transfer service giant was experimenting with Ripple for settling down of the transactions and for capital optimization.

Additionally, Ersek mentioned that the company is also experimenting with Ripple' native currency-XRP. The announcement comes a month after Ripple reported its tie-up with Moneygram- Western Union's biggest competitor. Reportedly, Moneygram is also testing Ripple in money transfers.  

It can be claimed that tie-ups as such with Western Union can have an enormous impact on the reputation of Ripple as a company and could possibly boost the price of XRP as well. The sceptics, however, claim that the money transfer process is redundant and banks don't really require it. It is noteworthy that many banks are utilizing Ripple's blockchain technology, which is known as XCurrent to track the money transfers and just a few of them are experimenting with XRapid which also blends in XRP usage.

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Interestingly, XRP adoption by banks can be described as the "strategic plan" for the growth of Ripple. Currently, Ripple has a market cap of $44 billion and its prices have fluctuated heavily since the beginning of 2018. At the onset of the year, it reached $4, whereas it stands again $1.13. When the two companies collaborated together, Ripple had officially announced it as a partner. However, Western Union remarked that they were only experimenting with Ripple's blockchain solutions. Now the Western Union CEO's remarks came into after he was inquired about the application and utility of blockchain technology in money transfers.

“I mean is it a technology looking for a business or do you see real use cases here?” asked Susquehanna analyst James Freeman during the earnings call.

According to Seeking Alpha here was the Ersek’s response-

"I would say and we are looking especially in the processing settlement and working capital optimization are also in the regulations part on the compliance part on the blockchain capabilities and we do test, we do have some tests we Ripple and we did that in some corridors also and the Ripple is one example.[…]

Well first, we have to differentiate between cryptocurrency and blockchain obviously. And then blockchain is definitely something interesting as an application, and which we may use it in several parts as I mentioned earlier is it a regulatory technology or digitally identifying or is it the settlement. And we with people do with ripple do some tests with some corridors on the settlement side. Is it a dollar to pesos on that side, can we use that in a real-time blockchain environment. [Emphasis ours.]"

Ersek’s persistently referred to “working capital optimization” and this can interpret as a significant statement because Ripple CEO Brad Garlinghouse has frequently publicised that banks will foster XRP as it will provide them with independence to park currency in so-called “nostro” and “vostro” accounts to expedite money transfers.

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