Blockchain technology has caused negative comments in an extensive range of industries. Bitcoin, the most popular application of block technology, shows how decentralized nature technology has and how it can change the global economic landscape. There is quite a few crypto that solves some financial problems.
Ripple (XRP) is built on block technology, enabling users to make instant payments. Ripple solves some problems with the SWIFT network that banks use. The company boasts of linking "banks, payment service providers and corporations through RippleNet" to improve global money transmission.
MoneyGram Adapts Block Technology to Improve Payout Efficiency
Earlier in January 2018, Ripple made a partnership with MoneyGram, the monetary giant. MoneyGram wants to launch a pilot program that will allow the use of XRP assets in MoneyGram's payment streams.
MoneyGram is one of the big names of companies that facilitate cross-border payments and remittances between business partners. The partnership between MoneyGram and Ripple will help the "money giant" improve the efficiency of the global payment industry. MoneyGram Chief Executive Officer commented:
"Everyday block technology promotes innovation. We look forward to launching our joint pilot program. We hope to increase efficiency and improve service for our customers. "
Why companies with lesser money transfers do not adapt the block technology?
One of the reasons why traditional financial institutions are unenthusiastic about adopting block technology is that technology is still at an early stage of development. Technology still needs to be developed before being adapted to traditional financial institutions. For example, Bitcoin is impractical as a means of micro-payments. Transaction charges with Bitcoin are comparatively more expensive than transactions with some crypto, making it unpractical for micropayments.
The second reason is the unstable price of crypto, which suggests that remittance firms will have to manage a huge number of foreign exchange swap hedging instruments in order not to be affected by the volatile crypto market.
Nonetheless, some cryptoLuts such as Ripple and Litecoin could provide traditional financial institutions with a quick method of integrating technology.
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