Royal Bank of Canada Working with Ripple on Prototype Blockchain Remittance System

A report on applications of distributed ledger systems called Blockchain: Democratized trust, published by Deloitte University Press, has revealed that in its search for suitable distributed ledger-based solutions, the Royal Bank of Canada (RBC) decided to utilize Ripple’s infrastructure to build a prototype system.

RBC began to research distributed ledgers about two years ago, and came to the conclusion that the novel technology can streamline its existing remittance operations across the globe.

“Cross-border payments emerged as a prime opportunity: Clearly, there was value in the ability to settle transactions in near-real time.”

According to the report, RBC decided to go with Ripple because their protocol could facilitate bank-to-bank communications, and also because transaction were settled in seconds, as opposed to other blockchain-based payment protocols.

“Because transactions are immutable and carried out in real time (five seconds), Ripple can also help mitigate fraud, credit, FX, and counterparty risks.”

While the report gave no specifics on the collaboration between RBC and Ripple, it did state that the companies are working on a “limited-production proof of concept” for the time being. RBC is one of Canada’s largest banks, with offices in 40 countries and $343 billion in assets under management, which is why the bank is currently testing various blockchain systems to ensure that they can be scaled up.

The report stated:

“As much promise as blockchain represents, it is crucial to validate its scalability, reliability, security, and performance for a large-scale deployment. RBC looks to do just that before expanding into other areas.”

RBC has also been experimenting with applying distributed ledger tech to their loyalty points program.

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