- Apr 2017
This article is a long read, but a good one. Here's an excerpt:
Ripple is not yet a world-beating company, which is to say that most banks, while excited about blockchain technology, haven't yet decided just whose blockchain, or chains, they are going to use. BBVA, for instance, is engaged in several pilots with the technology, including one involving syndicated loans as a member of R3. It also belongs to the Ethereum Enterprise Alliance and Hyperledger.
An MUFG representative said the Japanese megabank is still pursuing a previously disclosed project with Coinbase, a leading bitcoin startup, to use the cryptocurrency for cross-border payments.
"Our intent is not to compare or have these services 'compete' with each other," the representative said. "Because we do not believe there is a 'one and only' payment method, we are reviewing other payment systems. MUFG believes in offering options for our customers, so they can choose."
As for Ripple’s technology, MUFG has "finished the experimentation phase and [is] moving toward pilot/production testing this year."
Even Swift is adapting to the new landscape. In April, the cooperative announced that it was developing a blockchain proof of concept for the real-time reconciliation of nostro accounts used in cross-border payments. Wells Fargo, Bank of New York Mellon, BNP Paribas and a number of other financial institutions are taking part. (To build the proof of concept, Swift is relying on Fabric, an open-source blockchain framework incubated by Hyperledger.)
To succeed, Ripple will need "to be laser-focused on what problem they're solving, because there's a lot of competition in this space, and you can't solve all of everybody's problems," Light said. "They have competition from R3, from traditional fintech companies, even from some of the bitcoin-based enterprise software companies, so they're going to need to keep their offering competitive."
Even in this chaotic space, however, there are some signs that Ripple is emerging as a frontrunner. Seventy-five banks are now Ripple customers. In March, the startup poached a Swift executive. And when Santander dropped out of R3 in November 2016—one of several banks to do so over the past several months—it took care to reaffirm its commitment to a couple of other blockchain projects. One of them was the Global Payments Steering Group.
In recent conversations, Ripple's leaders were as sanguine about the competition as they were bullish on blockchain technology as a whole.