Could HSBC be planning to use XRPL for faster and more efficient payments across borders?
- 1 year ago
Clean the dust off your tin foil hats, because this is an article based on pure speculation and rumors circulating crypto Twitter. This article attempts to connect the dots to arrive at a probable partnership between the banking giant HSBC and Ripple, and the use of XRP Ledger by the banking giant.
Before addressing the actual rumor, one needs to know that HSBC has been constantly using the “nascent technology”, Distributed Ledger Technology [DLT] for facilitating payments across borders. While it hasn’t clearly mentioned the use of a particular product, it could be Ripple, XRP, Corda, or an in-house developed blockchain.
In 2018, HSBC’s Joshua Kroeker explained that HSBC was ready to do a live transaction using DLT and that it wouldn’t be a one-off transaction, even though the technology is still “nascent” and that they would have a working product by the next year.
In 2019, HSBC announced that it had successfully settled “more than three million FX transactions and made more than 150,000 payments worth $250 billion using distributed ledger technology”. HSBC’s Richard Bibbey, the Interim Global Head of FX & Commodities at HSBC added:
“The global, cross-border nature of HSBC and its clients sees us conducting thousands of foreign exchange transactions within the bank, across multiple balance sheets, in dozens of countries. HSBC FX Everywhere uses distributed ledger technology to drastically increase the efficiency of these internal flows.”
After a successful intra-bank test phase, Bibbey said that they were looking to expand this technology to help multinational clients – who also have multiple treasury centers, and cross-border supply chains – better manage foreign exchange flows within their organizations.
In addition to the above dots, there is an actual link between Ripple and HSBC via SABB [Saudi British Bank], a subsidiary of HSBC. Navin Gupta, the Managing Director for South East Asia and MENA, announced the partnership in April 2019.
The Actual Rumor
TheCryptHawk, a Twitter user, tweeted:
$XRP - I don't remember, did I tell you about HSBC going for #XRP Ledger soon?
This is just a random user? Maybe, but the user was also right about the rumor of MoneyGram and Ripple partnership, weeks before it actually happened. However, according to the tweets, HSBC will be “going for XRP Ledger soon”.
XRP Ledger is a decentralized cryptographic ledger powered by a network of peer-to-peer servers via a consensus protocol. Apart from facilitating almost instant settlement of XRP, XRPL is also being leveraged by Ripple’s xRapid, Forte, a gaming company to build a decentralized economic platform for in-game transactions, and others.
The above-mentioned user further tweeted:
#XRP - If PR goes as planned you should get hard or wet with some good news incoming next week! #XRPCommunity #XRPArmy $XRP #Ripple
Another Twitter user @haraldoXRP, commented:
“If they use the $XRP ledger, that will usurp Moneygram using XRP in flows via xRapid by a magnitude of dozens x”
So, the idea of HSBC using XRP Ledger, which is capable of handling more than settling XRP transactions, is not too far-fetched. However, it will only be clear if the rumor was true when the actual announcement occurs (or doesn’t).