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Cross border transfer

Singapore’s Project Ubin, Blockchain Payment System, Getting Ready for Commercial Launch

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The Monetary Authority of Singapore (MAS) revealed in a joint statement with Temasek the successful completion of the fifth and final stage of Project Ubin. The report presents an overview of the multi-currency payment system for cross-border settlements based on the blockchain. The report also provides insights into how the prototype of payments could help both the financial sector and the blockchain industry.

Benefits of the blockchain payments system

The payment network prototype created in partnership with Temasek and JP Morgan could facilitate faster and less costly cross-border money transfers. In addition, MAS noted that the technical details of the functionalities of the blockchain payment system and the connectivity interfaces would be publicly available to promote further innovations.

During phase 5 of Project Singapore’s Blockchain Payment Ubin, blockchain payment networks have completed payments in different currencies on the same network. Payment watchdogs pointed out that an international payment system modeled on their prototype could boost payment time and allow cheaper transaction fees than traditional global transfer models.

In use cases such as Delivery-versus-Payment (DvP) using digital currencies held in private exchanges, the application of smart contracts on the blockchain payment network was confirmed. Chief FinTech Officer of MAS, Mr. Sopnendu Mohanty, commented on the new prototype, noting that the regulator is anticipating further adoption and implementation of blockchain technology.

Singapore watchdog bracing for more blockchain adoption

Moving forward, the joint report by Temasek and the MAS claims that the commercial use cases of the blockchain payment network include cross-border payments in multiple currencies, foreign currency exchange, and settlement of foreign currency-denominated securities. 

In conclusion, the watchdog noted that the payments prototype could be linked with other platforms based on the blockchain to facilitate full digitization across as many sectors and applications as possible.

America’s New Comptroller Of The Currency is a Blockchain & Bitcoin Bull

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The new American Comptroller Of The Currency, Brian Brooks, is currently the new top banking regulator for President Donald Trump’s administration. Formerly, Brooks served as Chief Legal Officer of Major San Francisco’s Coinbase Digital Currency Exchange Platform.

Brooks’ appointment as an acting-Comptroller Of The Currency is a clear message that Blockchain is not a drawback; according to Brooks, Blockchain is a modern-day solution to our problems. While speaking to Forbes, Brooks said:

“Blockchain has potential to connect up, in a decentralized network, all kinds of data. It has the ability to create large, friction-free, decentralized networks of people. There is huge and great promise in Blockchain and crypto.”

Brooks bullish on bitcoin

Brooks also spoke comprehensively about digital currencies, regulations, and technology in general. While discussing cryptocurrencies in general, America’s new Comptroller Of The Currency specifically cited Bitcoin, Ethereum, and Ripple as solutions to multiple setbacks faced by more than a thousand banking institutions.

Recently, on 2 June, Brooks proposed a regulation aimed at rewriting the current “Bank Digital Activities” laws. The request for comments and public opinion signed by the new Comptroller Of The Currency includes the question of how artificial intelligence and blockchain technologies could be integrated into strict banking regulations.

America’s new Comptroller Of The Currency urges FED to adopt Blockchain in money transfer

Brooks is more troubled about the outdated techniques that financial institutions use to transfer money. He says:

“It takes three days if you’re trying to send money from the US to Europe… on the SWIFT network. Your money is at risk during that period. And even when the money is transmitted, foreign exchange fees are incurred. But a digital representation of value on both sides of the transaction can eliminate that friction and those costs.”

According to Brooks, the fact that other nations are developing modern payment systems is a threat to the United States. He also aims sly dig at the Federal Reserve, claiming that it is slow in adopting modern money transfer methods such as Blockchain, which are instantaneous.

Western Union Aiming to Acquire MoneyGram Potentially Affecting Ripple and XRP

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According to a report by Bloomberg on June 1, Western Union is targeting to acquire rival money transfer firm MoneyGram, in a deal that would significantly affect Ripple and XRP.  According to an anonymous source to Bloomberg, Western Union is awaiting MoneyGram’s decision after submitting an official takeover bid.

MoneyGram collaborated with Ripple back in 2019 utilizes Ripple’s cross-border technology to make overseas payments, On-Demand Liquidity, to process a portion of its remittances. In addition, Ripple owns about 10 percent of MoneyGram after successfully completing a $50 million investment in the payments firm.

Western Union exploring Ripple’s potential on facilitating international transfers

In the meantime, Western Union is looking into the perspective of XRP’s capacity to initiate cross-border transfers, however, it is not yet convinced on Ripple’s ability to save the payment giants money.  According to the CEO of Western Union Hikmet Ersek back in 2019, the firm’s initial tests on XRP uncovered that using digital currencies is five times costlier than using the company’s in-house system.

However, this perception seems to be changing. Back in April, a study by Credit Suisse suggested that  Western Union is still “testing and considering the use of Ripple (XRP) for cross-border [payments]” regardless of the firm’s initial perception on Ripple’s technology. 

MoneyGram yet to fully transition to XRP

The two money transfer companies are among the largest in the United States. According to Bloomberg, MoneyGram has a market value of nearly $164 million; as of 1st June with $848 million in total debts. On the other hand, Western Union has a market value of approximately $8.5 billion.

Although MoneyGram adopted Ripple’s ODL technology, the payments firm is yet to fully transition from the traditional system to go full crypto. As per a quarterly report by the firm, barely a fifth of the firm’s entire transactions in Q1 of 2020 were digital. However, it is anticipated that this trend might change due to the spread of coronavirus worldwide; as digital payments are preferred to walk-in transactions.