The fifth largest bank in the world will use Ripple (XRP) for a cross-border interbank payment service between Japan and Brazil
In an official MUFG press release dated November 9, 2018, the financial giant announced the signing of a letter of intent to develop a new cross-border payment service as part of a joint effort between MUFG and Bradesco.
The Brazilian subsidiary of Japan’s largest bank has signed an agreement with Sao Paulo’s Banco Bradesco, a leading universal bank in Latin America, to create a platform that enables money transfers directly and without intermediaries via a secure, economical and fast protocol.
According to MUFG, both parties trust that Ripple Inc, the creators of the XRP, is the best option to bring the project to life:
“With this letter of intent, MUFG Bank has decided to start the joint development for cross-border payments between Japan and Brazil, using Ripple’s cutting-edge technology. The new payment system – developed by Ripple, a software provider based in San Francisco – will support the banks in their work on commercializing a fast, transparent and traceable cross-border payment solution between Japan and Brazil.
With this new agreement, Ripple further consolidates its position as a leader in the financial services market. Since the release of xRapid a few weeks ago, the rating of the company and its public image has steadily improved.
MUFG: Strong interest in Ripple
MUFG had already spoken publicly about its interest in Ripple’s blockchain project. At a conference published by Steven Diep in September, a representative from the bank commented on how Ripple could deliver more satisfactory results than those traditionally achieved with the SWIFT messaging system:
“Today for many of us we may have to go through SWIFT and bring charges; many intermediary banks are involved, and an SLA on money transfers or movements typically takes anywhere from one to three days.
With technologies like Ripple we can do this in about 30 seconds, which is vastly different and at a cheaper cost when it comes to moving money between our branches and between our different countries within our network. This is very important to us.”
MUFG explains how Ripple’s solution helps them lower operating costs among their 50 offices around the world. #ripple #efficient #settlement #ripplenet #XRP pic.twitter.com/xAr00xpgtr
– Steven Bull Deep (@DiepSanh) September 3, 2018
In the past few days, the introduction of Ripple’s technological solutions has caused its token XRP to have an upward trend that caused it to outperform Ethereum’s market cap, albeit for a short period of time.
Recently there has been much speculation about a possible partnership between Ripple and SWIFT itself; However, SWIFT appears to be more interested in competitions than partnerships, and the team is focused on developing a proprietary blockchain.
It is not easy to predict when this platform will be used, but the Memorandum of Understanding lays the foundation for a possible future collaboration between the two financial institutions.