One of the less talked about impacts of blockchain technology is the extent of the effect it will have on the traditional banking and finance sector. A recent international payment between the Canadian company Ripple and Germany’s Reisebank is reportedly the first international interbank payment via blockchain technology.
What does this mean? Well, first of all Ripple has set up a Global Payments Steering Group (GPSG) calling it “the first interbank group for global payments based on distributed financial technology.” Although the company doesn’t make specific mention of it, this means that systems such as SWIFT as a global standard for processing international interbank settlements could be superceded by protocols based on the blockchain.
In addition to the GPSG, Ripple also has a network of international banks–separate from the GPSG–including 15 of the world’s 50 largest banks who have adopted Ripple’s technology and are testing real-time blockchain settlements in a low-risk environment.
Several months again, in July, the Canadian bank ATB Financial, in collaboration with Ripple and the German tech firm SAP, sent a CAD 1,000 transaction to the German Reisebank. The transaction was completed in 20 seconds which is dramatically faster than the several days time-frame which currently exists for international interbank settlements.