On June 18, Carlos Torres, CEO of Spanish bank BBVA, declared[1] that blockchain is “not mature” and faces major challenges. During the past month, blockchain’s effectiveness and maturity were also questioned by players as big as the Bank of Canada[2] (BoC), the Russian Central Bank[3], and DNB, the Central Bank of the Netherlands[4].
While blockchain can indeed improve the effectiveness of cross-border payments and cut the costs by eliminating the middleman, it hasn’t yet proven itself as a tool ready for industrial-scale use. What’s more important is that some of the banks might not be happy to give up those juicy margin fees.
Ripple’s attempts to modify the system
Ripple, a California-based payment network and protocol company, was established in 2012. Essentially, it focuses on facilitating transfers between major financial corporations.
Ripple is not quite your average cryptocurrency — some argue it’s not a cryptocurrency at all[5]. First of all, it doesn’t champion the dreams of overthrowing the government along with the banking system. Oppositely, it chose to work with mainstream financial players from the very start. As Brad Garlinghouse, CEO of Ripple, told Cointelegraph[6]:
We were from the beginning really looking at how we work with governments, how we work with banks. And I think some in the crypto community have been very much, “How do we destroy the government. How do we circumvent banks?”
Garlinghouse believes that governments aren’t going anywhere, saying, “In my lifetime, I don’t think that’s happening,” so it’s only logical to cooperate with them and work within the existing regulatory framework. That attitude helped Ripple to land crucial partnerships with important players, including, China-based payment services provider Lian-Lian[7], the Saudi
