BesiMRipple sees life beyond RBI cryptocurrency ban

MUMBAI: Fintech company Ripple, which straddles the world of cryptocurrencies and cross-border remittances, is unfazed by the Reserve Bank of India’s (RBI’s) restriction on banks dealing with cryptocurrencies. The company is betting on Basel norms and the RBI’s own panel report on digital currencies for a new framework that could lead to rescinding the ban.“Ripple’s global head of infrastructure innovation Dilip Rao said that unlike Bitcoin and cryptocurrencies, Ripple plans to use the Interledger protocol – the payments protocol created by Ripple, to enable remittance of fiat currency and not to replace it.” Besides using XRP for remittance, The company also offers its platform Ripple Network to lenders for facilitating cross-border remittances — rivalling the SWIFT network that has been conventionally used by banks.
Ripple has tied up with private lenders Yes Bank, Axis Bank and IndusInd for using the blockchain-based platform for payments without the use of the cryptocurrency asset. It, however, maintains that it aims to use XRP in future as a ‘connecting cryptocurrency’ to facilitate remittance.Last year, Ripple had also set up an office in Mumbai and appointed former Citibanker Navin Gupta as country manager. “There is a great regulatory comfort with Ripple Net — particularly in the light of the Bank for International Settlements’ policy requiring central banks to have a backup for payment systems having non-similar technology,” said Rao. He added that this was crucial as payment systems were systemically important and a cyber-attack to systems would be akin to infection of the core. In India, while the RBI has barred banks from servicing companies dealing in cryptocurrencies, it has also set up a panel to look into the possibility of a central bank digital currency.
“Even from a geopolitical point of view, countries are having concerns over the existing cross-border payment systems, which can be switched off with a turn of the switch,” said Rao. In addition to pitching Ripple for cross-border payments, the company is offering its own platform as an alternative to Real Time Gross Settlement (RTGS) system for countries that do not have a developed interbank network.