Ripple and the IMF’s association has finally been revealed. At the Fintech Festival earlier this month, the two were represented in conversation and collaboration. IMF chairwoman gave a sweeping speech endorsing digital currencies, perhaps even vaguely describing XPR in particular. The two have already shared a history, especially through Ripple’s work with central banks.
Ripple and IMF meet in Fintech Festival
On November 12th at the 2018 Singapore Fintech Festival, Ripple CEO Brad Garlinghouse shared the stage with IMF’s Ross Leckow. They discussed the role of blockchain in the Fintech industry, focusing on the ASEAN region. They agreed that it is a game-changer in the system of global payments.
Garlinghouse states that blockchain will have a lasting impact on the global financial sector: “We must totally change the nature of how payments flow around the world. We must remove the friction and make the stream of value more instantaneous and reliable.”
The conversation between the two organizations is not new, but is more prominent and public than ever before. The plot thickens:
IMF speech endorses digital currencies (and Ripple?)
The next day at the Fintech Festival, the IMF held and published a what may be a historical speech at the Fintech Festival. The mighty and monolithic financial superpower the IMF has publicly announced it will change with the time, and embrace digital currencies.
In her speech, IMF’s managing director and chairwoman Christine Lagarde urged central banks follow “the winds of change” and consider issuing their own digital currencies.
“I believe we should consider the possibility to issue digital currency. There may be a role for the state to supply money to the digital economy,” Lagarde adds. This would would answer to the public policy goals financial inclusion, security and consumer protection, and provide privacy in payments.
The IMF suddenly highlights the importance of “being open to change, embracing change, shaping change. Technology will change, and so must we.” – If you can’t beat ‘em, join ‘em.
It is even speculated that Lagarde even refers to Ripple’s micropayment application, Coil, when she says that the IMF expects money to become more convenient – “readily available for online and person-to-person use, including micro-payments.” She continues to say that currency is expected to be “cheap and safe, protected against criminals and prying eyes.” With Ripple having significantly low transaction fees, it seems to be painted as an ideal of the future of international currency.
Ripple supports central banks to use digital currency
Ripple’s digital currency acts as a bridge between fiat and cryptocurrencies, to be used by banks and payment providers. xRapid, Ripple’s liquidity solution for banks, is cooperating with payment providers Mercury FX and Cuallix, as well as cooperative financial firm Catalyst Corporate Federal Credit Union. The qualities designed for this XRP are to enable central banks to carry out international transactions as seamlessly as possible. This means fast and cheap international transactions, with a low impact of volatility.
Asheesh Birla, Ripple’s senior vice president of product, says: “Here’s something where we’re finding a ton of value and providing a ton of value to our customers using digital assets to move money more efficiently.” The commercial application of XRP in transnational financial services is “a critical milestone in Ripple’s bid to make cryptocurrencies and the underlying blockchain technology a part of the financial mainstream.”
Ripple’s CEO Garlinghouse has affirmed he believes “dozens” of banks will use XRP by the this time next year. Meanwhile, in the Bangkok Fintech Fair earlier this year it was said that Ripple is already working with 40-50 banks.
One year ago, Ripple hosted tens of the world’s central banks at the Central Bank Summit to explore the future of international payments. Garlinghouse stated at the event:
“The Summit provided an opportunity to explore the full payments landscape: central banks’ domestic trials, Ripple’s growing cross-border network and interoperability across systems. Together, these form the beginning of an Internet of Value, where payments move as easily as the data across the internet.”
Ripple is acting at the central link to connect between the traditional banking system and the fast-developing blockchained currencies. And who is behind all the central banks? The IMF. The IMF works closely with central banks and international loans, playing a decisive role in the global economy. By working closely with central banks, Ripple is inevitably working with the higher power of the IMF.
Ripple is trickling into the depth of the global financial system where it may be establishing a firm grip. Are we facing a new superpower collaboration?