Across Latin America, a fragmented payments landscape has resulted in low interoperability, often leading to high fees for both senders and receivers of payments. Regulators in the region are working — with varying progress and approaches — to enable real-time payment options that foster greater interoperability, increase financial inclusion, generate revenue for banks and businesses and help protect economies from global market volatility. With use cases like inbound remittance flows seen as a critical component of GDP for numerous LATAM countries, identifying ways to reduce costs associated with those remittances is a key driver of regional growth.

At the same time, central banks are becoming more interested in re-examining their relationship with crypto, creating an opening for the crypto and blockchain sectors to help bring forth a unified LATAM payments system to make low-cost, faster and more seamless transactions a real possibility. Of course, not all crypto is created equal. Using a digital asset that was designed specifically for payments will be key to implementing a successful digital payments system that can handle high transaction volumes without friction.

Supporting Trends

Latin America as a region is highly dependent on the US dollar: from US remittance flows and USD as a reserve currency, to economies like Costa Rica and El Salvador that use dollars interchangeably with local bills. Some LATAM businesses even use USD as a liquidity source by routing payments through American banks to transfer funds to international accounts within the region. This reliance on USD means crypto adoption in the States is likely to have a major impact on crypto adoption in Latin America.  

There are also various new fintech players in the market that are working to get involved in consumer payments. From an awareness standpoint, for example, the sponsorship of football clubs across the region by crypto exchanges is helping to bolster public understanding of how to access crypto. Public adoption and embrace of crypto as an alternative to cash holdings or bank accounts is also gaining popularity in some countries as an easier, less volatile alternative to local currency. In one case, the use of crypto as an alternative to cash is being promoted by the government in El Salvador where the adoption of Bitcoin as legal tender is significant. And there are central banks, like that of Brazil and Mexico, that have recognized the value and potential of crypto and have started developing and providing their customers with digital wallets.

Because Brazil is often a leader in Latin America in the adoption of new technology, it’s worth noting that the country is driving smart and progressive crypto use and regulation. In March of 2022, Brazil announced that it had selected nine projects to advance in its quest to develop a Central Bank Digital Currency (CBDC), indicating a real thirst for a digital future. Brazil’s central bank has also been ahead of the curve in showing public-facing interest in the potential of DeFi, NFTs and even the metaverse. And in terms of consumer adoption, Brazil is seeing crypto trading activity boom, portending a bright crypto future for the region.

From a compliance perspective, businesses in the region are able to use the same fiat compliance measures, like Know Your Customer (KYC) and Anti-Money Laundering (AML), for crypto transactions to ensure the safety of these flows and help protect the integrity of the financial system. 

Barriers and Challenges to Success

Because crypto has, at times, been perceived as a threat to the established bank sector — which has historically controlled the financial markets and influenced regulatory and legal structures in the region — any major movement toward crypto is likely to encounter some level of structural resistance. As payments infrastructure is often dictated by larger banks and their governmental relationships, this could make it difficult for digital banks to compete for market share on a level playing field. But, in fact, as we’ll describe below, crypto offers all kinds of financial institutions powerful new business opportunities.

From a consumer perspective, there is also a disconnect between traditional banking and the use of money for everyday transactions across many LATAM economies. Lower incomes often equate to less acceptance of fee-based banking services, meaning that both convenience and efficiency take a backseat to value in many markets. This can manifest itself in people being more willing to wait in line to pay cash rather than incur a fee for an online transaction that might be completed in seconds. Without implementing better ways to make digital payments and financial services available, large sections of the LATAM economy are often left underbanked.  

Lastly, with such a high dependency on USD and US clearing institutions, as costs rise in the States, fear and volatility in the LATAM marketplace also rise. The possibility of insulation from other regions’ financial swings underscores a major reason why achieving interoperability across Latin America and avoiding the de-risking trend in the US is so critical for LATAM economies.

Opportunities and What’s Next

There is a lucrative opening for traditional banks, fintechs and governments to increase adoption of crypto-forward technology to address this underbanked and fragmented market. These challenges will be much easier to solve once digital banks have more ready access to the market, helping drive down high fees and frictions associated with institutionally-controlled transactions. This will also help move people away from physical cash and into the digital payments space — increasing convenience for consumers and creating new markets for both businesses and banks without heavy reliance on the traditional US banking sector.

The COVID-19 pandemic has had a significant impact on both consumers and banks in the region that have historically relied on cash transactions. Many financial institutions are already seeing growth in digital payments due to an uptick in cashless transactions as the region looks for safer, quicker and more convenient payments alternatives. An Americas Market Intelligence study shows that Brazil’s banked population grew to 88% in 2021 with Chile not far behind at 82%. Argentina, Colombia, Mexico, and Peru all experienced growth that year as well. The region will need to continue prioritizing foundational infrastructures like internet connection, electricity, and institutional trust for digital payments to remain viable and financially inclusive. 

Smart and progressive regulation will beget further successful regulation — leading to increased innovation and progress around crypto across Latin America. In the wake of the regulatory debate happening in the United States, there is a large opportunity for banks and fintechs to work with regional regulators to create smart public policy frameworks to ensure that all boats rise.

LATAM is a diverse and varied region, with both developed and emerging economies breaking into the digital payments landscape to varying degrees. But by finding interoperability across the region, Latin America can become more financially independent, more financially attractive to outside investment, and more financially inclusive.

Learn how Ripple’s payments solution can help absorb price fluctuations, allowing for more certainty, visibility and transparency in real-time payments.

The post LATAM: Low Interoperability Highlights Crypto’s Big Potential appeared first on Cryptology IQ.

Non-Fungible Tokens, or NFTs, are creating tremendous opportunities for creators and collectors of art, memorabilia, and other digital assets. Since the initial launch of Ripple’s Creator Fund, we have seen incredible momentum and exciting NFT use cases come to life on the XRP Ledger (XRPL). Creators like Justin Bua, xPunks, and Sebring Revolution continue to prove out tokenization projects and capabilities for metaverses, gaming, art and beyond.  

Making Waves in Media & Entertainment

Now Rare Air Media, producer of Michael Jordan’s visual autobiography For the Love of the Game, is getting into the NFT game, too. The company is working with VSA Partners, the premier creative agency partner to Ripple’s Creator Fund, to design, develop, and market a range of NFTs on the XRPL, including a one-of-a-kind selection of digital assets covering former NBA player Michael Jordan’s life and storied career. The first batch of NFTs is expected to hit the market in Q2 2022 and will include an intimate selection of original, momentous images of Michael Jordan, accompanied by his personal thoughts and observations leading up to the photo.

As additional use cases for programmable, functional NFTs continue to be built out and tested across industries, the media & entertainment space has been among the earliest adopters of the technology: expanding NFT use cases across music, sports, ticketing, access rights, and beyond. From celebrities like Snoop Dogg and Paris Hilton, to professional athletes like LeBron James, and major brands including Disney and the Grammys — it seems there is no shortage of possibilities for NFT applications in the industry.

High-profile brands, celebrities and their agencies have specialized needs when it comes to identity and ownership of digital assets. The unique security and identification attributes of distributed ledger technology have opened up extraordinary opportunities for creators of digital content to not only assign value to their work, but to profit from it and share behind-the-scenes stories with an even wider audience. With more and more collectors coming aboard the blockchain train, both sides of digital asset commerce can be confident in the assets they purchase and create. 

Why Create NFTs on the XRPL?

The XRP Ledger has ease of use and native token functionality built-in by design. Released in January, NFT-Devnet — a beta environment built to enhance NFT support on the XRPL — lowers the technical barriers to entry for those looking to get started either creating and minting their own NFTs or on behalf of their customers and their brands.

A couple of the key benefits to using XRPL for NFT creation include:

• Speed: each transaction on the XRPL takes no more than 3-5 seconds to complete.
• Low Cost: at fractions of a penny per transaction, costs are inexpensive enough to enable a wide variety of NFT use cases.
• Sustainable: the XRPL is the first major blockchain to be carbon-neutral — maintaining neutrality since 2020 — and is more efficient than leading proof-of-work blockchains.
• Simplicity: NFT capabilities on the XRP Ledger pre-program all activities that an NFT user may wish to complete, including minting, burning, trading, requiring royalties, and more.

Created for All Creators

Whether you are new to the NFT space or are looking for a new ledger to build on, the XRPL is customizable to meet your NFT needs—large or small. As one contributor to the growing XRPL community, we’re working closely with developers, creators, marketplaces, creative agencies and brands to help define the future of NFTs and the tokenization of assets in a low-cost, sustainable and accessible way. 

As the Creator Fund and its supported NFT projects continue to grow and gain momentum, especially across the media & entertainment industry, it’s likely we will continue to see expanded uses and partnerships take shape—not only on the XRPL but across the broader tokenization landscape as a whole. 

Check out the Creator Fund for more information or learn more about tokenization on the XRPL. 

The post For the Love of NFTs: VSA Partners and Rare Air Media Bring Jordan NFTs to the XRPL appeared first on Cryptology IQ.

In our recent survey of over 1,600 financial leaders across 22 countries, we uncovered some pretty astounding insights: A whopping 85% of payment leaders at financial institutions globally think their country will launch a digital currency in the next four years. 

If these last two years in a pandemic have taught us anything, it’s that time flies. So this begs the question: What needs to happen between now and four years from now in order to make those launches possible? It turns out there’s quite a bit to consider, not only as central bankers and commercial bankers, but as individuals as well.

In our first post on this topic, we discussed why the term “financial inclusion” has become such a buzzword when talking about Central Bank Digital Currencies (CBDCs), and how we at Ripple succinctly define it (hint: making financial services available to people who don’t have access to them today). While the insight gleaned from our research is promising and the uptick in global CBDC exploration encouraging, there is still much to be addressed in regards to how the implementation of these digital currencies will impact society, and what primary hurdles we need to collectively overcome in order to achieve that vision of a more financially inclusive future. 

Key Use Cases: A Quick Recap

As a refresher, in the first post we identified three primary use cases where we see CBDCs having the biggest immediate impact on financial inclusion across the payments and financial landscape: cross-border remittances, access to peer-to-peer (P2P) loans, and the ability to establish credit history. 

If properly planned for and implemented, the application of digital currency technology to these use cases has the potential to dramatically change the landscape for the better, making the world a more accessible and inclusive place. Across all of these use cases, however, there is a consistent set of practical hurdles to solve: education, user experience, identity, offline access and security. In the first post, we covered education and user experience, so let’s dive into identity, offline access and security, and how CBDCs can help clear these hurdles.

Key Hurdles to Implementation: Going Beyond the Hype

Identity

Developed countries require a national identity to open a bank account, which poses inclusivity problems in and of itself. For citizens who don’t have a family name, a passport, a driver’s license or any other form of identification, this presents a seemingly insurmountable hurdle. We need non-traditional ways of establishing identity for those people to gain access to financial services. With the use of a CBDC, those individuals would have the ability to be associated with a digital wallet, allowing them to meet basic Know Your Customer (KYC) requirements for identity verification. For example, in places where mobile phone usage is high but access to financial services is low, leveraging registered SIM cards and mobile phones as a way of proving identity for payments without a traditional ID number could help create a threshold to meet these requirements.

Even in countries like the US, there is ample opportunity for digital currency-backed solutions to improve current processes related to payments and identity. In the case of the pandemic, governments around the world were challenged to extend stimulus funds to those without bank accounts or because of technology limitations. Funds were delayed, or had to be issued by paper check—or people slipped through the cracks altogether. With a CBDC, stimulus monies could be distributed instantly and directly to every citizen with a mobile phone—regardless of bank account or ID status—via a digital wallet using similar SIM card/mobile methods.

Offline Access

In order to access and use CBDCs, internet access is required. CBDC usage will grow with internet usage through mobile devices, especially given the increasing rate of smartphone penetration throughout the world. However, implementing critical telecommunications infrastructure won’t be enough to match the pace of innovation needed to ensure constantly available internet access on a 24/7 basis. This goes for both developing nations and countries like the US, where currently 7% of all Americans say they don’t use the internet. 

CBDC platform design needs to consider offline access. Having internet access as a prerequisite to success may harm CBDC adoption and usage, both for those without regular access to the internet and for instances where unexpected power outages occur or devices run out of battery, for example. 

With this in mind, CBDCs that provide alternate solutions—particularly those that don’t require constant charging and can run without a direct power source or internet connection for consecutive days or weeks—and can accommodate offline scenarios will be critical to implementation. One example of how to solve for offline access could be a solution that mirrors the Indian e-Rupi, which leverages digital voucher mechanisms such as QR codes that can be printed offline and scanned to make retail purchases.

This is one idea of many being piloted, and we believe even better solutions will surface. As overall CBDC adoption and usage continues to grow, it will be critical for central banks and governments to proactively think about how to enable offline access, built in by design.

Security

While the use of digital currencies and digital wallets holds a lot of promise for financial inclusion, it also poses potential security risks. With a bigger chunk of the global population making payments, transferring funds, and managing finances on their mobile devices, new vulnerabilities arise. 

These security breaches can come in both physical and digital form. For example, simply leaving your phone at a restaurant or other public place, or having it stolen on public transportation. Virtual risks can include anything from phishing scams and social engineering hacks, to Denial-of-Service (DoS) and double-spend attacks. While a lot of people already use financial apps on their mobile devices and are aware of these risks, many do not and this will likely be a barrier to entry for those people. 

Luckily there are ways to avoid and mitigate these risks with the use of CBDCs. One such solution is a blockchain-based CBDC that uses a multi-signature (“multi-sig”) wallet. This means at least two other trusted parties would hold credentials to that same wallet to help ensure no unauthorized use or access. These other trusted parties could be the central bank itself and/or family members or other contacts of the mobile device owner. Additionally, by imposing spending limits and methods to track transaction frequency when the CBDC user is offline, the impact of such attacks would be greatly reduced.

Paving a Path Forward

While there is work to be done to pave the way for a CBDC-driven future, the journey ahead is an exciting one and undoubtedly promises a more inclusive, sustainable financial system. Digital currencies offer many additional benefits that are currently unmatched in today’s financial landscape, and we’re confident that central banks, commercial banks, and society as a whole can work together to overcome the hurdles and create a clear path forward as we continue to prove out the technology, pilot projects around the world, and ensure equal and equitable access.

Download our CBDC whitepaper to learn more.

The post CBDCs: From the “Hype” to the “How” of Making Financial Inclusion a Reality – Part 2 appeared first on Cryptology IQ.

We recently surveyed over 1,600 financial leaders across 22 countries and discovered that 37% of senior financial institution executives around the globe consider both “financial inclusion” and “greater access to credit” as the largest potential breakthroughs for Central Bank Digital Currencies (CBDCs). This echoes the stated goals of many countries and central banks that are actively exploring CBDCs or that have already launched pilots.

Clearly, CBDCs hold a lot of promise. But to paint a picture of a perfectly utopian digital currency-driven world without addressing the hurdles it will take to get there is not a realistic or useful approach. Implementing CBDCs is no small feat, and we’d be remiss to talk about them otherwise. That being said, it’s important to take a closer look at what the real-life use cases, hurdles and implications will be — not only for us as individuals, but for society as a whole — and how we can work together to take them from hype to reality.

Is “Financial Inclusion” Just a Buzzword? 

It’s almost impossible to talk about CBDCs without mentioning financial inclusion. But lately, it seems as though the term financial inclusion has become more of a buzzword than a meaningful, tangible outcome. So what does financial inclusion actually mean, and why is everyone talking about it?

Here at Ripple, we define financial inclusion as making financial services available to people who don’t have access to them today and doing so in a way that is cost-effective and net financially positive for the people using those services. In this case, leveraging CBDC-enabled solutions to provide an easy way of doing things. This includes even the most basic of financial services, e.g. sending money to a friend or family member, having a secure place to store your money, etc. Not just for those in developing countries or those who are more tech-savvy, but everyone. 

What Does This Actually Look Like in the Real World?

The opportunities of CBDCs are endless, but for brevity’s sake we’ve highlighted three key use cases where we see CBDCs having the biggest impact on the payments and financial landscape. 

Efficient and Cost-Effective Cross-Border Remittances
Many countries around the world are making strides towards improving what have historically been inefficient and expensive cross-border payments. One example is The Kingdom of Bhutan and its central bank, the Royal Monetary Authority: As remittances (e.g. funds sent home by migrant workers) are an important component of their economy, the country is now turning to a CBDC solution to lower the cost and time involved in making these payments. They are taking a truly digital-first approach to solve these challenges and others as part of their financial inclusion journey.

Access to P2P Loans
In many parts of the world, particularly those that are still heavily cash-reliant, something as simple as a peer-to-peer (P2P) loan, e.g. loaning money to a friend or family member, could be made much faster, more efficient and secure with the use of a digital currency sent and received via a digital wallet. For many in today’s current landscape, this simple act can take upwards of a full day (or more) to complete.

Ability to Establish Credit History
In many parts of the world, citizens are unable to borrow money or take out a loan because they haven’t been able to establish a credit history. Typically this boils down to geography, leaving many of those citizens unbanked. The use of a CBDC would not only help provide a credit history, but a broader history with always-on access to resources regardless of physical location.

Key Hurdles to Implementation: Going Beyond the Hype

Together these CBDC use cases can have a powerful impact on financial inclusion. Across all of these use cases, however, there is a consistent set of practical hurdles to solve: education, user experience, identity, offline access and security. In this first post, we focus specifically on education and user experience.

Education
There is a global educational gap when it comes to understanding digital currencies. Not only how to use them — including the possibilities, nuances, and required technical savvy — but also the why behind them. Onboarding people into a digital currency system who are unclear on how to use that system, nor what the benefits are of using it, will run the risk of low usage rates and financial exclusion for many.

Take China’s digital Yuan as an example. As one of the first to pilot and test a digital currency two years ago, user growth is increasing but is currently outpacing transaction volume. This is being attributed to limited access and incentive for use among both businesses and consumers, especially when compared to their existing mobile payments systems. 

To help overcome this hurdle, the People’s Bank of China recently improved its app to make it more customer friendly and enable more users in certain regions to sign up and start using the digital Yuan. China and other regions taking a similar approach could take it a step further by providing basic in-app education to onboard users leveraging gamification techniques — one solution that could go a long way in getting consumers up to speed quickly. A play-to-earn model that ensures people know how to use the app or digital wallet before they start handling real money and digital currencies would be one way to ease people in, granting them further access and additional benefits as they go. 

User Experience
Depending on where you are in the world, dominant forms of payment vary across the board. In most developed countries, digital forms of payment like credit cards are likely the most dominant. In more developing countries, for example Kenya, mobile payments have become mainstream. Whatever the preferred form of payment between individuals and businesses, it offers a certain level of trust and always-on accessibility for users. Central banks must consider how a CBDC can be leveraged in a similar fashion by individuals from all backgrounds — including both foreign and domestic — making CBDCs as easy to use as cash and credit cards are today.

On the one hand, there are un/underbanked populations who are unaccustomed to using financial apps entirely. On the other, there is the complexity of many current digital asset wallets to consider, which are not intuitive even for people who have a lot of experience with mobile banking and stock trading apps. Understanding pain points like these will be key to driving CBDC adoption, especially given the steep learning curve that individuals face when utilizing cryptocurrencies. In this respect, ensuring accessibility for all will result in the need to create an intuitive user experience for consumers to navigate.

A few solutions for ensuring UX accessibility could include: tying identities to mobile phone numbers to simplify password proliferation; providing apps and other end-user services that can best align to specific customer needs; or providing direct, programmable customer channels from central banks to end-users. For example, a CBDC could provide a customer channel or user-friendly app through which central bankers could quickly and easily distribute stimulus payments to ensure more widespread distribution, ease of access, and help stimulate the economy. 

Central banks and institutions alike will need to create a seamless user experience to help increase user interaction with a potential CBDC platform. 

So What’s Next?

In our next post in this two-part series on how to make financial inclusion a reality with CBDCs, we will be looking at three other primary hurdles to overcome in order to bring these use cases to life: identity, offline access, and security. We are just beginning to scratch the surface of what a digital currency-backed system can achieve, and there is no doubt that as the technology and its many applications continue to expand and evolve, so too will our ability to understand and leverage these solutions to create a more inclusive financial system — overcoming the hurdles together as individuals, bankers, service providers and society as a whole. 

Download our CBDC whitepaper to learn more.

The post CBDCs: From the “Hype” to the “How” of Making Financial Inclusion a Reality – Part 1 appeared first on Cryptology IQ.

It’s March Madness. Three weeks, 136 teams, and two college basketball championships. While there is no shortage of talent and promise on the court, it’s often the proven programs with the most experienced, seasoned coaches and practiced players that are the odds-on favorites.

The same is true in crypto. There is a lot of hype and activity in the arena, but at the end of the day, it’s the proven companies — and their teams of cutting-edge customers and partners — with the experience, industry savvy and technical resources that deliver the most trusted solutions. 

A Lot Has Happened Over the Last Decade 

Ten years, 55 countries and hundreds of financial institutions. That’s Ripple’s stat line. A rare crypto triple-double. 

Collectively, it demonstrates a vibrant history of innovation and success in crypto and blockchain. Individually, the numbers represent tried and true, cherished customer and partner relationships that have helped pioneer the space, spanning a diverse range of use cases, geographies and regulatory environments.

Partners like Siam Commercial Bank (SCB) rely on Ripple to power instant, low-cost cross-border payments in Thailand and the broader region. With Ripple, SCB boasts one-minute end-to-end processing times, 80,000 monthly transactions and $400 million in monthly person-to-person remittance settlements. 

And partners like Nium that use Ripple to process real-time transactions in Southeast Asia and was the first to connect the region to remittance corridors in North and South America. Founded in 2014, Nium was up and running on Ripple in eight weeks and is saving 98% on domestic transfer rates for customers. 

And don’t forget Pyypl, the blockchain-native financial services platform that helped bring Ripple’s payments solution to the Middle East market for the first time: enabling a real-life use case for improved treasury flows between USD and EUR, and providing Pyypl customers access to additional working capital to help streamline cash flow.

Innovating and Iterating on Better Blockchain Solutions

These companies are only three of the many that have helped to create a virtuous circle of innovation at Ripple, wherein partner experiences result in learnings and insights that then inform new solutions. It’s these relationships that enable us to better support our partners as they navigate an increasingly crypto-forward world and continue to discover new applications and use cases for the technology.

It is this cycle that helped give rise to the success of our On-Demand Liquidity (ODL) solution, which now has near global coverage in 22 destination markets. It also highlighted the need for RippleX, which launched in 2020 to support developers building on the XRP Ledger (XRPL) with open-source code, tools, programs, applications, documentation and more.

Crypto for Business: The Next 10 Years

Recently, companies have consistently asked us how to attract new customers and build revenue streams using crypto but without a major resource-heavy commitment (i.e. in-house development, managing regulatory requirements, maintaining tech to keep up with the industry), or the typical pre-funding requirements of traditional payment rails. 

In response, we are leveraging the success of ODL and our expertise in accessing liquidity across multiple markets to design and build Liquidity Hub. This plug-and-play platform will make it easy for companies of any size to buy, sell or hold crypto internally or on behalf of their customers absent the time, resource or capital commitments normally required to do so.

Through one simple implementation, Liquidity Hub offers access to deep liquidity pools and leverages smart order routing and advanced algorithms to source optimized prices for a variety of digital assets. With an all-in-one, enterprise-grade dashboard, companies will have an easy and transparent way to manage and monitor trading. And importantly, Liquidity Hub offers the ability to reduce pre-funding in capital accounts, helping to free up some of that working capital to be allocated elsewhere. 

Brad Chase, Ripple’s Sr. Director of Data Software Engineering, has a long tenure of experience building products and solutions to meet customer demands: “We’ve worked day and night to build a global, enterprise-grade crypto product in ODL, powering real payment volume and providing real utility for our customers. Now with Liquidity Hub, we’ve distilled the foundational crypto trading and liquidity management capabilities into a stand-alone offering that will provide a seamless way for our customers to bring crypto to their end-users.”

Ten years ago, Ripple was the first company with an enterprise-level B2B solution to leverage crypto as a means of solving cross-border payments challenges. Since then, we have assembled an impressive lineup of partners and solutions to help propel the industry forward and keep the conversation going. Now, we are building on that history to once again innovate on behalf of our customers. We’re looking forward to the next 10 years together.

Want to join the movement? Learn more about Liquidity Hub and how your business can get started. 

The post The Next Evolution of Crypto for Business appeared first on Cryptology IQ.

For many of us in the industry, it comes as no surprise that tech and finance are heavily male-dominated. Many fintechs are intersecting with blockchain and crypto — two other predominantly male spaces — which further widens the gap.

But women in blockchain have persevered and are paving the way for future generations to confidently enter the space, knowing this community of trailblazers is there to support, uplift and further diversify the industry.

Emi Yoshikawa, Ripple’s VP of Corporate Strategy and Operations, was featured in Forbes Japan alongside a group of these trailblazing women to discuss their shared experiences in the blockchain space. 

After witnessing the 2008 financial crisis from Wall Street, Emi chose to pivot by attending Harvard Business School to further her education. She saw potential in the crypto industry to fill the cracks in the existing financial system — a system she saw crash just a few years earlier — and has worked at Ripple since 2016.

Even with six years of blockchain experience and a Harvard degree under her belt, Emi still has moments of self-doubt. But instead of letting imposter syndrome win, she seizes opportunities like speaking engagements and op-eds to position herself as a thought leader in the industry.

Kathleen Chu and Shirley Kwok, Head of Communications at Polygon and International Business Director at OKX, respectively, believe that embracing the necessary risks needed to move forward — knowing there is potential for failure — is a mindset that can help carry women to the next level. While there is no shortage of complex challenges for women in the industry, facing them head-on with a willingness to take risks and fail is what will make women stand out not only in the workplace, but in society as a whole. 

“Crypto is fast-paced and the industry is really new, so everyone’s still learning. It allows you to make mistakes and simply move on to what’s next,” says Shirley. 

As head of APAC marketing for TZ APAC, Katherine Ng makes it a priority to provide equitable opportunity within the workplace. She notes the pressure put on Southeast Asian women to adhere to certain cultural expectations and has found the courage to speak for herself through strong allies and supportive leadership.

While the number of women in blockchain has grown from 8% to 12% in the past two years, in a hypothetical room of 100, only 12 of them are women. There is still work to be done, but amplifying voices like these is an important step to bringing future generations into this space.

These women are passionate about building awareness in the industry. Not just around the endless opportunities to learn, grow and advance your career in blockchain but also around fostering a community. 

Actively cultivating environments that bring women to the forefront of crypto — especially via speaking engagements and promoting more women to leadership positions — is crucial to driving the future advancement of this technology and business in general. In fact, a McKinsey study showed that companies where women comprised at least one third of executive roles were more likely to outperform companies with fewer women in leadership positions — by as much as 48%.

Emi herself says it best: “By having more female representation…other women who are interested can feel more comfortable, connected, and encouraged to get into the space.”

Join Ripple in taking the lead to close the gender gap in crypto, and discover how Ripple is elevating voices like Michelle Munson’s on UBRI’s “All About Blockchain” podcast.

The post Women in Blockchain: Emi Yoshikawa’s Global Influence appeared first on Cryptology IQ.

In this edition of The Ripple Drop, we take a deep dive into liquidity. RippleNet General Manager Asheesh Birla joins us to explain how crypto liquidity works, why it’s important, and the roles On-Demand Liquidity and Ripple Liquidity Hub will play in driving its growth. 

Rising Crypto Liquidity 

Asheesh tracks the growth in crypto liquidity from the early days of Bitcoin and why it matters, noting that crypto is much easier to move around the world than fiat currency because it does not require a network of large banks and nostro accounts to achieve liquidity. This ability to easily interchange coins or fiat currency is facilitated by crypto exchanges like Coinbase, Bitso and Bitstamp. 

Currently, Asheesh points out, hundreds of billions of dollars in crypto are traded daily on these exchanges, a dramatic increase from 2013 when the industry had yet to even cross a billion dollars in liquidity annually. 

“More liquidity [means] we’re able to offer a better product experience. You can send cross-border payments for a cheaper rate,” he says. 

According to Asheesh, the amount of crypto liquidity roughly doubles every year, which portends great things for customer savings and experience, especially in terms of cross-border payments. 

RippleNet’s Ascent 

Amidst this backdrop, RippleNet notched a banner year in 2021. 

Asheesh says RippleNet ended the year with a payment volume run rate of over $10B and expanded our On-Demand Liquidity (ODL) product to 22 destination markets, observing that this milestone brings ODL near to complete global coverage. 

Asheesh attributes this rapid growth to two distinct advantages offered by ODL versus traditional fiat movement and correspondent banking networks: its higher transaction speed and its more efficient use of capital. 

He explains that the latter is key as rising interest rates could make capital even more expensive in the year ahead. Since ODL requires no pre-funding, partners can avoid tying up that pricier capital in nostro accounts, magnifying their cost savings with ODL. 

The continued growth in general crypto liquidity enhances this value proposition even further because it drives down base transaction costs, making it cheaper to send money faster and more efficiently using ODL. 

Liquidity Hub for Business 

The success of ODL is also at the root of our idea to launch Ripple Liquidity Hub, the enterprise-focused product previewed at Swell, which we’ve been leveraging for internal liquidity management as part of our ODL product for nearly two years.  

As the clear leader in provisioning crypto liquidity through third-party market makers, Asheesh says companies began asking us how they could leverage our expertise to offer a variety of digital assets (such as Bitcoin, Ether and others) to their customers. Ripple Liquidity Hub is the forthcoming natural evolution of both those conversations and the existing RippleNet product. 

Likened to how Google Flights or Kayak can aggregate pricing from multiple venues for booking travel, Ripple aims to provide a somewhat similar solution for liquidity that works behind the scenes. Ripple Liquidity Hub will build on existing Ripple infrastructure to integrate across multiple liquidity venues including exchanges, OTC desks and market makers enabling businesses to source digital assets at optimized prices. It will enable a simple integration for a turnkey experience, allowing Ripple partners to quickly offer their customers the ability to buy, sell and hold crypto with deep liquidity pools. 

The response has been overwhelming, says Asheesh. Potential customers are excited by the prospect of Ripple Liquidity Hub because they trust Ripple’s expertise and track record to simplify what would otherwise be a daunting proposition.

Looking ahead, Asheesh predicts 2022 will be another big year for RippleNet and its products. In particular, he is energized by conversations with the RippleX team about NFT opportunities for RippleNet customers. He sees any possible collaboration as an example of our commitment to always be ahead of whatever’s next in crypto for enterprise. 

Want to hear more? Watch the latest episode of The Ripple Drop for full details on these projects. 

The post The Ripple Drop: Growing Crypto Liquidity, Banner Year for RippleNet and Ripple Liquidity Hub appeared first on Cryptology IQ.

To borrow a line from the film Spinal Tap, the volume on crypto has been turned up to eleven. 

The financial industry continues its march towards crypto with Worldpay’s recent announcement that it will expand merchant adoption of cryptocurrency with “pay by crypto” options. Binance also just revealed plans for a new payments processor enabling users to make retail purchases using digital assets, as are LUNU who enable customers to accept crypto payments. Even Warren Buffett is getting in on the action, purchasing $1 billion in shares of Nubank, a Brazilian digital bank focused on crypto.

The fast-growing appearance of crypto in the consumer mainstream is equally remarkable. Advertisements by companies like Coinbase and FTX can now be found throughout sports venues, and the industry staged a veritable takeover of Super Bowl spots earlier this year. Crypto.com purchased the naming rights to the home of the Los Angeles Lakers. Talk of NFTs is seemingly everywhere. And in a nod to the bizarre, hairband legend Dee Snyder is now exploring a lawsuit against Randi Zuckerberg over her crypto-inspired sendup of a classic Twisted Sister tune.

So Who’s Buying, Selling and Holding Anyway?

At the root of all of this is one common theme: increased consumer interest in crypto. A Cornerstone Advisors survey found that of consumers who already hold crypto, 60% of them would “definitely” use their bank to invest in cryptocurrencies. Further, a PYMNTS.com report found that 78% of millennial and 82% of Gen Z crypto owners are interested in using it to make contactless purchases. 

Not only are consumers ahead of the crypto mainstream adoption curve, but they also have different objectives and varying degrees of crypto savvy. From those who are trading day in and day out with a solid understanding of the landscape; to those who are in it for the long run and investing for the future; and even those who are just getting started. There is a vast opportunity for businesses to stand out as a trusted advisor and leader in the space by meeting their customers where they are with crypto supply and demand.

It’s not a question of “if” for crypto consumers, but rather a question of “when.”

Consumer Expectations Place Demands on Business 

The volume and range of consumers engaging in crypto is skyrocketing, and their goals and intentions are equally diverse. This carries vast implications for businesses and requires an enterprise-level strategy for catering to varying customer demands. Businesses and merchants across industries and markets that can provide multiple options for customers to buy and sell will be well-positioned to meet these demands, especially as we continue to see a momentous shift towards contactless transactions. 

Key to this strategy is an ability to support liquidity across various digital assets and diversified consumer portfolios. As consumers move to buy, sell and hold multiple types of crypto – including for the use of retail and other everyday digital purchases – exchanges and financial providers must be able to meet their speed, security and pricing expectations. 

Designed and built leveraging the success of Ripple’s On-Demand Liquidity solution, Liquidity Hub will check the boxes for businesses seeking to better serve customers and break into the crypto space. Through a single API integration, Liquidity Hub will tap multiple liquidity pools, ensure optimized pricing across a range of digital assets and increase working capital.

Plug-and-Play Platform for Sourcing Digital Assets

Liquidity Hub is a digital asset aggregation platform that leverages smart order routing and advanced algorithms to source optimized prices for a breadth of digital assets across multiple liquidity pools. This includes BTC, ETH, LTC, ETC and BCH, to name a few. 

It will support both trading and treasury use cases to help build multiple new lines of revenue, and unlock a plethora of new avenues for both businesses and financial institutions to remove common barriers to crypto access, deepen engagement and connect with their customers. And it will continue to evolve over time, adding access to tokenized assets, staking and yield farming in the future.

Companies using Liquidity Hub will be able to free up working capital because – unlike most competitive offerings – the platform will not require pre-funding in destination accounts, which is often costly and time-consuming to secure. Ripple will also provide access to additional working capital to help fund business operations.

With one seamless implementation, Liquidity Hub will offer a turnkey solution that makes it quick and easy for companies to get up and running and have the ability to buy, sell and hold crypto for their customers. Ongoing operations will be simple and intuitive with an all-in-one, enterprise-grade dashboard for managing, trading and reporting functions that streamline the user experience and provide customized reporting options. 

Ultimately, Liquidity Hub paves the path to a crypto-first future for business, helping traditional banks, neobanks, fintechs and financial providers around the world – even the infrastructure providers that support them – to quickly and confidently ramp up a crypto offering and cross the finish line ahead of the competition. 

Learn more about Ripple Liquidity Hub and how your business can get started today.

The post How Businesses Can Meet Rising Consumer Demand for Crypto appeared first on Cryptology IQ.

Digital Assets in Korea: A Policy Approach to Smart Regulation

The emergence of blockchain technology and digital assets is transforming the global financial landscape into a more accessible, transparent, fair and efficient system. This transformation has resulted in the development of new use cases and the opening up of new markets, providing innovative pathways for individuals and businesses to access and build a more inclusive global financial system.

However, as is often the case with emerging technologies, the full scale and scope of this impact from a policy perspective is difficult to understand, and future trends are even more difficult to predict. This emergence means new types of organizations are providing new services and products—which in turn provide significant benefits to the economy—but could also potentially pose new forms of risk. The technological and economic characteristics of blockchain and digital assets therefore require smart regulation. 

Regulators and policymakers are faced with the unique challenge of striking a delicate balance between fostering innovation, while simultaneously ensuring sufficient safeguards are in place to reap the full benefits of this technology. 

K-Pop: Korean Popularity with Blockchain and Digital Assets

The APAC region dominates the digital banking sector and has become a global leader in digital payments solutions. More specifically, Korea has long been an early adopter of new technology and has been quick to embrace new innovations and opportunities, including blockchain and digital assets. And it’s a vibrant market: Total market size for digital assets has grown to USD 45.9 billion, and daily transactions on Korean exchanges have reached USD 9.4 billion with BTC (13.6%), ETH (12.4%), and XRP (10.2%) as the top three digital assets traded.

This growing popularity puts crypto in Korea under the spotlight, with policymakers wanting more regulation for consumer protection and as a tool to better manage AML (Anti-Money Laundering) risks, specifically around exchanges. Initial steps have been taken: In March 2020, South Korean Parliament passed an amendment to the Act on the Reporting and Use of Specific Financial Transaction Information which came into effect a year later, extending licensing requirements to virtual asset service providers. 

However, while the policy intent is sound, the broad scope of implementation has meant that almost all entities that offer solutions using digital assets are brought within scope of the regulation – even if they’re not considered exchanges. This renders onshore firms hesitant to join the digital assets movement, ultimately stifling innovation and causing a chain reaction of backlash from crypto investors. Needless to say, additional regulatory reform is in high demand and was a hot topic in the region’s most recent presidential election. 

A Policy Framework for Digital Assets

At Ripple, we have long been advocates of clear, well-defined regulatory policy as a key driver to further expansion and global adoption of digital assets. We believe this is essential for achieving a more financially inclusive future and a world without economic borders. 

In an effort to help support further innovation in Korea, we recently partnered with Oxford Metrica, a UK-based leading advisory firm, and GBC Korea, a blockchain-based M&A platform based in Seoul, to publish a whitepaper that provides a policy framework for digital assets and crypto in Korea. The paper, titled “A Policy Framework for Blockchain and Digital Assets in Korea,” (with a Korean translation) provides recommendations for Korean policymakers and regulators to further develop the blockchain landscape by enacting a smart regulatory framework, and encourages the participation of financial institutions throughout the region.

The paper examines a series of digital asset taxonomies across various jurisdictions, and proposes recommendations for further developing the use of digital assets in Korea. This includes:

• Adopting a digital asset taxonomy aligned with global best practices – providing a clear distinction between payment tokens, utility tokens, and security tokens
• Implementing a risk-sensitive digital asset regulatory framework to provide certainty and encourage innovation in the sector
• Fostering digital asset innovation sandboxes to allow market participants to test new and innovative products, services and business models with end-users in a controlled environment with regulatory oversight
• Promoting public-private collaboration through active dialogue between regulators and market participants

The paper also explores a cross-border payments use case powered by RippleNet, our blockchain-based global payments network, and our corresponding On-Demand Liquidity (ODL) solution which leverages the digital asset XRP for instant and low-cost cross-border payments, eliminating the need for costly pre-funded accounts. In addition, we outline a mergers and acquisitions use case using GBC Korea’s GMAP platform. 

Results Are In: Hunger for Blockchain Development Abounds

To gauge the appetite for development of blockchain technology among leading Korean financial institutions, Oxford Metrica conducted a survey of the CEOs or Chairpeople of the largest financial institutions in Korea. The survey found that there was considerable interest in further blockchain development. 

Key findings from the survey include:

• A resounding 100% of respondents indicated an interest in and were actively pursuing the idea of adopting blockchain technology as part of their mainstream operations. 
• In examining respondents’ progress towards implementing the technology, 40% had already developed a proof of concept and 60% were in the pilot stage of implementation. 
• In terms of lines of business being pursued, 80% were focused on payments, while 20% were focused on capital markets.

It’s clear that a framework for virtual asset regulation in Korea is needed. Our hope is that the proposed policy recommendations will provide legal clarity to the industry, its markets, and consumers on the nature of blockchain and digital assets throughout the region. Each of the policy proposals—whether implemented separately or together — can succeed in achieving the goal of fostering innovation while ensuring sufficient safeguards, now and in the future.

The post Why Policy Regulation for Crypto in Korea is Key appeared first on Cryptology IQ.

Countries across Asia Pacific have become global leaders at delivering instant payments through digital banking solutions. Their experimentation and innovation around alternative payment rails to better facilitate both cross-border and domestic instant payments serves to bolster the region’s growing stature and leadership across the payments sector.

In recent years, APAC has grown to dominate the digital banking sector, with 20% of approximately 250 digital banks worldwide based in the APAC region. 

Regional leaders to highlight include: Singapore — ranked in the world’s top five most competitive financial centers — which has enacted clear and effective governmental regulation and support of innovative payment technologies and achieved a 58% increase in instant payments in 2021. And the Philippines, which saw virtual currency transactions jump 71% from 2020 to 2021 — substantially driven by new solutions like crypto-assisted remittances and digital payment options. 

While instant payments are taking off faster in APAC than anywhere else, their success in the region is not guaranteed. Key contributing factors will include further blockchain and global banking platform adoption as well as close collaborations between business and government.

Let’s dive into how instant payments — both crypto and non-crypto versions — have evolved, discuss the barriers to successful implementation and what to expect next for this advancing region. 

What Are Instant Payments and Why Should I Care?

Instant payments are digital transactions between participating banks that leverage an instant messaging/payments layer, allowing for real-time settlements that deliver exceptional end-user experiences. Many non-crypto instant payment networks require pre-funding beneficiary accounts to enable a real-time transfer. 

A higher level of transparency — which is often unavailable in transfers from traditional financial institutions — can be achieved through digital payment rails. For example, some transactions are able to bundle the payment and payment data together using end-to-end communication flows and immediate confirmation notifications. This type of transaction is a convenient, secure way to exchange information between all parties involved. There are also various overlay services that help with ease of use and security for both domestic and cross-border payment system linkages, like linking mobile numbers to bank accounts as a way of identity verification.

Crypto-forward instant payments offer even further benefits, including increased speed and efficiency for both sender and receiver. With 24/7/365 availability, transfers can be processed at any time, including weekends and holidays. This dramatically speeds up the global flow of capital and gives consumers always-on access to their funds. In the case of transparency, payments service providers (PSPs) can further benefit from the use of services like RippleNet’s account lookup API, which allows both sender and receiver to exchange information via flexible API calls on many types of metadata, including validation of a beneficiary’s account details prior to sending a payment. 

Certain crypto solutions, such as On-Demand Liquidity, also eliminate the need for pre-funding. This frees up working capital that ODL customers can then reallocate and use more efficiently to stoke additional growth. Real-time settlement and lower-cost payments in local currency are made possible regardless of funding source or destination, thanks to the flexibility of crypto (e.g. XRP) which acts as a bridge currency between sender and receiver.  

The Evolution of Asia-Pacific Banking and Finance

Across the region, changes in consumer habits and impacts of the COVID-19 pandemic shed light on the evolution of instant payments into more mainstream usage. 

The pandemic influenced major shifts in overall payment behaviors in APAC. While some shifts are part of global trends, like the decline of cash usage and an accelerated move from brick-and-mortar to e-commerce, others are region-specific, like the Republic of Palau’s push towards innovative, sustainable payment products and their underlying blockchain technologies. Consumer behavior has changed with COVID-19 and consumer expectations have grown alongside advanced payment solutions. 

Additionally, the rise in smartphone adoption within APAC has opened up the market for the launch of new applications which enable instant payments. With smartphone usage across the region expected to reach 83% by 2025, demand for real-time payments will continue to rise across consumers and businesses alike. 

(Source: Mobile Economy)

Barriers to Success

Although this region is generally progressive with new technology, privacy and security concerns remain a central barrier to the adoption of instant payment rails. Research shows that around 4 in 10 consumers across APAC are hesitant to store their financial data online and do not trust the security of these platforms, while 25% believe their personal devices lack sufficient security. In Singapore, e-commerce-related cyber crimes rose by nearly 75%, prompting the government to change data privacy laws to help combat this trend. 

In years past, the region battled a lack of understanding about the blockchain technology that underpins crypto digital payments across APAC businesses. Over the last couple of years, however, we’ve seen APAC crypto adoption speed up, with an estimated 81% CAGR (Compound Annual Growth Rate) in the global blockchain market over five years at $23.3 billion USD by 2023. Among the many use cases of blockchain technology, cross-border payments comprised the largest individual use case at 15.9% globally in 2021.

That being said, the payments landscape across APAC is still highly fragmented in terms of individual country policies and regulations. There are bright spots, like the linkage of real-time payment systems in Southeast Asia between Singapore’s PayNow and Thailand’s PromptPay, but as with any industry, each country brings its own unique infrastructure and currency to work with – and the current lack of standard integration for regional cross-border payments often leads to expensive workarounds.

So What’s Next?

Appearing on the horizon of digital payments across APAC is a crossover to profitability. While only 13 of the 249 digital banks worldwide are profitable, 10 of those are based in Asia, showing that the APAC fintech sector is a proving ground for new financial services. This means that continued rapid expansion can also be expected as the region’s fintech market is anticipated to grow at 72.5% annually through 2025, showing dynamic adaptation, moving at speeds currently unmatched by Western countries. 

As the use of crypto in payments continues to expand and evolve in APAC, harnessing the power of that momentum will rely on close collaboration between national governments and private companies to achieve maximum impact and drive down costs. In the wake of strong governmental support for new financial services from countries like Singapore and the Philippines, we anticipate greater guidance from regulators throughout the region. We can expect that governments across APAC will provide clarity on emerging blockchain and crypto technologies that are poised to solve payments challenges and open up new business opportunities across a fragmented yet evolving region.

The post APAC Leading the Way in Instant Payments appeared first on Cryptology IQ.