Seven more Japanese banks have joined the SBI Ripple Asia’s Money Tap money transfer platform. An SBI Group portal press release made on June 26 mentioned Chikubo, Ashiga, Towa, Shimane, Toho and Fukushima Banks as the new entrants.
The move comes barely a month after 13 more Japanese banks joined the MoneyTap App platform. Powered by XRP, the cashless payment application is a massive win for Ripple’s growing relationships with banks.
The San Francisco-based blockchain powered payments ecosystem champion has its eyes set on the vast but untapped East Asia cashless payments sector.
The XRP Research Center also confirmed the development on Twitter saying:
“SBI Group announces that SEVEN additional Japanese banks (20 in the aggregate as of today) have agreed to invest in Money Tap, Co. Ltd, a brand-new company operating a domestic settlement system for digital payments that Run on Ripple.”
MoneyTap Reliant On xCurrent
The app is dependent on Ripple’s xCurrent, but it does not use XRP. It enables money transfers between banks and individuals via smartphones or QR codes. The app was launched in October 2018 after SBI Holdings got its operational license from Japanese regulators. The idea of a round-the-clock money transfer service was conceived by a consortium of 15 Japanese banks.
SBI Sumishin Net Bank and Bank of Yokohama were among the banks that fronted blockchain technology as the answer to low-cost, secure transfer service. SBI Holdings, a part owner of the SBI Sumishin Net Bank, went into partnership with Ripple Labs forming the SBI Ripple Asia. Consequently, the MoneyTap App that reduced costs of transfers to a tenth or twentieth of the existing wiring costs came up.
In Japan, cross border remittances would cost thousands of Yen in fees before the Ripple powered platform. The app also enabled affordable movement of small units of funds such as 100 yen at a small fee any hour and day of the year. Similarly, the app has fueled e-commerce payments as well as foreign exchange margin trading due to its convenience. The app’s goal is to finally have 61 Japanese banks on board, which would represent 80 percent of all banking assets in the East Asian nation.
Eyeing Asian Cashless Payments Market
Asia has become the focus of cashless money solutions innovators as its large number of millennials begin to challenge fiat’s reign. Facebook’s stablecoin, for example, has its eyes set on India. The digitally savvy generation is seeking to replace their wallets for mobile money payments in a continent with the highest numbers of the unbanked. In Japan, most transactions are still cash-based therefore time-based due to short banking hours. The Ripple powered app, therefore, has excellent growth potential.
Nevertheless challenging the traditional cash-based system is not without its risks. Building confidence in the usage of blockchain-powered solutions is an uphill task that has its obstacles.
As an illustration one of MoneyTap’s earliest three adopters, Resona Bank withdrew from the platform as per an April 11 announcement. This was a big blow for the xCurrent-powered platform seeking to garner more banks into the fold.
Resona Bank is part of Resona Group, Japan’s 5th largest banking group. Ripple, however, took it in their stride getting more significant partnerships like MoneyGram to cement their value.