On November 15, SBI Ripple Asia and SBI Remit launched a blockchain-based money transfer service between Japan and Vietnam with support from Tien Phong Commercial Joint Stock Bank (TPBank).
The announcement cited the rise of Vietnamese residents in Japan to more than 330,000 by late 2018, which is expected to continue in the future. A blockchain-based money transfer service is faster compared to legacy systems and is secured by cryptography. While Ripple is not directly involved in this project, its technology is at the forefront of this initiative.
SBI Ripple Asia is a joint venture between Japan’s SBI Holdings and Ripple, with SBI as the controlling shareholder. The firm offers technology and marketing support for financial institutions interested in using RippleNet.
On the other hand, SBI Remit is a partnership with US-based money transfer company MoneyGram and sometimes uses RippleNet to enable real-time transfers. A few weeks ago, TPBank announced that it joined RippleNet for blockchain cross-border payments, the first Vietnamese bank to do so. SBI Holdings has a 19.9% stake in TPBank, which is one of the top 10 banks in Vietnam with assets of $5.3 billion as of 2017.
With a structure already in place, the companies have now drawn out partnership contracts to implement blockchain for cross-border money transfer. For TPBank, the objective is using the messaging system of RippleNet, which competes with the incumbent SWIFT network.
“Our cooperation with SBI Ripple Asia Co., Ltd on the application of blockchain technology in cross border money transfers marks an important turning point in enhancing our customer experience and makes international money transfers via TPBank faster, more convenient and safer than ever before,” said Nguyen Hung, CEO of Tien Phong Bank.
Discussing the benefits of the project, Hung added, “Transactions are executed faster while ensuring safety and transparency and cash flows will still be legally transferred via foreign banks to Vietnam. At TPBank, transactions are ensured to comply with all domestic and foreign regulations, including AML.” This comment clarifies that while Ripple’s technology is used, XRP is not.
Yoshitaka Kitao from SBI Group said they have plans to introduce remittance incorporating crypto-assets in the future. Kitao was likely referring to using XRP for faster transfers between the two countries, but SBI also has its own blockchain currency called S Coin.
Last week, Thailand’s Bank of Ayudhya launched a blockchain cross-border payments platform between Thailand and Laos. The initiative uses Interledger, the technology that underpins Ripple.