Ripple was founded in 2012 and aims to move money in a similar way to the way information is transferred. Navin Gupta, MD Ripple India, illustrates with a simple analysis how blockchain can improve efficiency without burdening the economy.
DeepTalk is an interactive series on new technologies in which executives, experts and trendsetters at the forefront of technological change discuss and share their unique perspectives and knowledge with community experts on disruptive technologies such as AI, ML, blockchain, fintech and IoT.
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The fourth episode of DeepTalk “Show me the money” illuminates the advantages of the blockchain in a way that laymen can understand. Is blockchain the way to price-correcting falling economies in many countries? How can nations integrate blockchain technology with more applications and a wider network of individuals and institutions, both internally and internationally?
Santanu Paul, CEO & Co-Founder of Talentsprint, discusses with Navin Gupta, Managing Director of Ripple, the largest blockchain user in the world, how blockchain can grow beyond cryptocurrency.
Ripple was founded in 2012 and aims to move money in a similar way to the way information is transferred. Navin Gupta illustrates with a simple analysis how blockchain can improve efficiency without burdening the economy. A lead time of 30 days is the norm for paying for goods; but it takes 33 days including the transaction time, resulting in a 10% loss of working capital. The smooth movement of money that is an instant transfer adds working capital for 36 days per year. That would attract central banks and finance ministers alike.
Ripple is currently focused on high volume, low value transactions such as NRI money transfers to India and talent export from emerging markets where large amounts are processed. Navin Gupta tells an interesting case of the Santander chairman’s son, who told his mother that transferring funds through the bank is very complicated and therefore making payments through OnePay FX. That got them thinking about the need to change banking policies inside out, which led to Santander adopting Ripple. Aspects such as interoperability and technology are pushing institutions to join Ripple’s network. Although networks are currently operated in silos, Gupta envisions a world in which there will be not a single blockchain, but rather blockchain pools with connectivity like ILP, similar to TCP / IP.
So how do you get to the heart of Ripple? Ripple is a cross-border payment and processing network. It is simply not a cryptocurrency, but an excellent bridge currency in terms of point-to-point monetary transactions. Today people can use USD, GBP, INR or Euro and tomorrow they will use XRP [cryptocurrency used by Ripple payment network]. XRP is listed on around 250 stock exchanges worldwide.
Is Ripple’s turning point in terms of customer acquisition in sight? There are currently around 30-50 heavy corridors around the world and 80% of the money transfer in volume and value takes place in 20% of the corridor. Once a flywheel effect is seen within these corridors, metrics can be obtained to see how long it takes for Ripple to cross this threshold, after which it becomes easy to capture.
UPI is working on cross-border, cross-border solutions, so there will soon be an opportunity for UPI and Ripple to work together. Technology doesn’t stand in the way of cultural integration and options are valuable, says Gupta, if the right ideas come at the right time.
The period of time that the digital asset goes through is similar to the dotcom bust. However, companies like Amazon and Google are building on this as they can see the shift at the consumer level. For example, to read the Financial Times, you have to subscribe to $ 60, and that’s expensive. If a reader is interested in a single article that FT offers for a cent or two, there is currently no payment system that allows this. As a result, FT loses millions of customers and, on the other hand, readers cannot access certain content – all because there is no underlying payment system that can support billions of high-speed, low-cost transactions. In the digital asset system, when you access a blog or content site, information flows on the one hand and money on the other. Readers can surf the web without encountering a paywall. Games and virtual goods are another large industry where nations can be viewed as virtual communities and the underlying commerce can be done through the digital channel.
One of the ways to achieve growth is to embrace innovation, or at least not to limit it. Blockchain technology is safe, but ironically, people find it hard to trust the technology. Gupta says he works with regulators and there is fear of the unknown about technology. But if regulators see value in this, they will certainly allow regulators to take it into account.
If you look around today, parts of the world that look advanced in terms of blockchain, cryptocurrency, internet of value, etc. are smaller nations like Estonia and Singapore that are trying to attract global talent through early innovation. These nations are faster in the area of regulation and have become a center for innovation and experimentation.
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Prajakta is a writer / editor / social media diva. She loves everything that is quaint. Her favorite things include dogs, Starbucks, butter popcorn, Jane Austen novels, and neo noir films. She previously worked for HuffPost, CNN IBN, The Indian Express and Bose.