RippleNet lands PNC Bank, sees institutional adoption continue to increase
On Wednesday, Pittsburgh-based PNC bank became the latest financial institution to adopt RippleNet’s blockchain technology. RippleNet is now active in six continents and forty countries, and at over one hundred financial companies, including American Express, Moneygram, and Santander.
PNC is the ninth largest bank in the United States by assets, and the fifth by number of branches. Like most banks its size, it serves everyone from everyday customers to high net worth individuals, and small business to large corporations. But just how will Ripple’s technology impact PNC’s day-to-day operations? According to Ripple’s website:
“Now, a commercial client in Pennsylvania receiving a payment from a UK buyer will be able to receive payments against their invoices instantly, transforming the way they manage their accounts receivable and allowing them to better manage their working capital.”
Ripple’s focus across all its product offerings is to make global, cross-border payments more efficient. Though much maligned, their cryptocurrency offering, XRP — which briefly overtook Ether as the second-largest cryptocurrency by market cap late last year — accomplishes this by providing real-time liquidity, lowering foreign exchange costs, and offering fast payment settlement speeds (four seconds), a large pain point when in the cross-border payment space.
However, Ripple also offers a suite of products that do not necessitate the use of XRP — in fact, this is one of the most common arguments against investing in XRP — in the form of RippleNet, which includes xCurrent (for processing payments), xRapid (for sourcing liquidity), and xVia (for sending payments). For the time being, PNC will only be using xCurrent, specifically to accept inbound payments.
Notably, though, PNC will be using the product in a live environment. As Ripple’s senior vice president Asheesh Birla told Coindesk:
“I think the important thing is this is not a test. Ripple only signs production clients, so they are taking this product into production. There’s no pilot, there’s no proof-of-concept — that’s already been done. They’ve committed [to transactions] with other customers.”
Birla also pointed out that the speed at which xCurrent facilitates payment processing would also provide an advantage for small businesses that bank with PNC:
“Providing instant payments instead of waiting two to three days, that sounds like a short time, [but] that’s two to three days without access to capital. Having that is a real game-changer,” he said.
Of course, Ripple hopes that PNC’s use of xCurrent will lead to the implementation of other products they have to offer, specifically xCurrent:
“With PNC, the idea is to get a few corridors lit up with xCurrent … When they’re ready to start talking about emerging markets, we’ll introduce them to xRapid. We’re working to get them started with xCurrent so it’s not a completely new feature to move to xRapid,” Birla explained.
Skeptics of blockchain point out the lack of real-world use cases for the technology. However, that argument becomes harder and harder to make with this sort of adoption at the institutional level. As Ripple continues to make in-roads in the cross-border payment space — which McKinsey claims accounts $155 trillion in transactions — it is worth monitoring how its competitors, notably Stellar, will compete with its progress.