Ripple, whose annual Swell conference begins today, unveiled a development surrounding a bank partnership. Siam Commercial Bank (SCB) will be the first financial institution to access the multi-hop feature on RippleNet, giving them the ability to settle payments for other banks on the network.
As a result, there’s no need for a “one-to-one connection” for bank settlements. SCB can now receive and settle payments without a “bilateral relationship between the originator and beneficiary institutions,” according to a press release. Ripple stated:
“With multi-hop, financial institutions can connect directly to SCB, which can settle and payout across the region without exchanging currencies multiple times and adding heavy fees. The result is a seamless payments experience into and out of the ASEAN region. For smaller financial institutions which previously did not have the ability to make payments into ASEAN, multi-hop will democratize access to those countries and make payments easier, regardless of payment size or their financial institution’s pool of liquidity.”
Ripple and XRP
It’s unclear what impact if any the new multi-hop feature will have on the XRP price, considering Ripple is the majority owner of the cryptocurrency. Meanwhile, the Ripple website has been overhauled. Instead of the trio of software solutions xCurrent, xVia and xRapid, only RippleNet is featured on the website as a single payment solution for banks and other transfer service providers.
On various XRP forums, users are debating whether RippleNet could be the famous “convergence” that has been discussed in recent months in which all three Ripple software solutions merge into one. RippleNet is featured on the new website as a solution to provide on-demand liquidity while ensuring that payments can be sent and received globally.
Ripple features XRP for payments on RippleNet, which according to the company’s xRapid solution serves as a bridge currency to provide banks with liquidity. Ripple CTO David Schwartz weighed in on Twitter, saying:
Multi-hop allows customers who initiate payments w/ xVia to have 1 pile of fiat, typically with an xCurrent customer, that they can use for payments across RippleNet. Still need to acquire the destination asset to settle a payment though, and that's where xRapid and XRP come in.
— David Schwartz (@JoelKatz) September 28, 2018
Schwartz went on to say
Some banks may just not be willing to become an xRapid customer for various reasons such as regulatory or just international payments not being that important to them. Multi-hop means they can use other xRapid instances to settle their payments and still get many of the benefits.
— David Schwartz (@JoelKatz) September 29, 2018
Schartz’s explanation suggests XRP will play a prominent role RippleNet. It remains unclear, however, how RippleNet fits into the trio of software solutions — xCurrent, xVia and xRapid — and whether the new RippleNet will replace them.