The number of banks that have recognized the potential of Ripple’s software solutions is increasing weekly and is gradually expanding Ripple’s partner network. Euro Exim Bank wants to use the payment solutions combined for a new type of financial services.
Euro Exim Bank wants to use the cross-border software applications xCurrent and xRapid to control and optimize a new trade finance system. The new pilot will be launched immediately, as Euro Exim Bank’s Head of Compliance, Graham Brigt, expects it to be a great success. He told Global Trade Review that the traditional use of xCurrent is to be expanded:
While Ripple previously focused its xCurrent product on payment messaging only, the two parties are now preparing to test a feature that embeds trade finance instructions into an xCurrent message.
This is similar to what Swift offers today, but in a blockchain-based network that allows real-time exchange without intermediaries.
The technical idea, apart from the mere transmission of the payment order, is to transmit a trading order to the counterparty for execution. This can be a letter of credit or a performance bond. This can be completely mapped in a message transmitted via xCurrent which constitutes a new use case for the network and potentially for XRP as well. Euro Exim Bank intends to launch the application in the first quarter of 2019.
Bright further describes that xRapid is taking on a major challenge that Swift and traditional finance have found difficult to solve so far. Banks must ensure liquidity abroad when making cross-border payments. Swift and xCurrent are both messaging services that send payment orders. However, the actual settlement usually takes place from a deposit in a nostro account with a local correspondent bank:
We operate in a number of countries around the world. Risk management in some banking markets may make it difficult for customers to obtain currencies efficiently in order to pay for their goods and services internationally.
Euro Exim Bank was established in 2011 with offices in London and St Lucia and provides financial services to import and export companies worldwide.