The payments company is now the first Chilean transfers startup to join the Ripple network. Announcing the development on their website, Currency Bird said:
” Ripple Net will bring many benefits for the more than 12,000 Currency Bird customers, as it will allow the company to add new routes to its more than 50 destinations, new currencies, better prices, and faster transfer speeds, all using the technology developed by Ripple based on blockchain, which allows the transfer of digital data with sophisticated and secure coding.”
As per a Ripple report, by the beginning of 2019, the blockchain startup had over 200 RippleNet customers. Ripple officially launched in Brazil in mid-2019, and now it has gained a foothold in Chile via its partnership with Currency Bird.
Formed in Santiago Chile in 2015, Currency Bird’s operations center around international electronic remittances.
Chile Remittance Market Ready for Disruption
Currency Bird has been the to-go remittances channel for Chileans living abroad. It is also a popular payments channel with foreigners with temporary Chilean residency. Businesses operating in Chile but have foreign trade deals that require payments also use the platform.
According to a World Bank report, remittance flows hit a record high in 2018. At least $529 billion was sent to low and middle-income economies, a 9.6 percent rise from 2017’s figures. The global value for remittances in 2018 was at $689 billion, up from 2017’s, $633 billion.
According to the World Bank’s Remittance Prices Worldwide database, the cost of sending $200 stands at 7 percent in 2019. This value is too high and is besides, higher in Pacific’s small islands and the African corridor, often at 10 percent. Banks have been charging a 11 percent charge for most cross-border payment transactions. A Sustainable Development Goal (SDG) has consequently been set to cut down these costs to 3 percent by 2030.
The revitalized US economy has led to a 10 percent increase in remittance in Latin America. Mexico, Colombia, and Ecuador receive the highest number of payments on the continent. Chile may not receive hefty amounts of remittances as its sister nations, but it is leading in internet access.
Over 72 percent of Chileans can access the internet. Unfortunately, over 71 percent of all Chileans online have no access to international credit cards for payments. The population is mostly reliant on cash-based methods and local cards for trade. The cross border-trading environment in Chile is therefore ripe for disruption since it has all the ingredients for success, set up.
Central Banks Working with Ripple Network
Currency Bird now joins other world-renowned institutions like MoneyGram, Banco Santander, American Express, Banco Itaú and Standard Chartered Bank profiting from Ripple’s services. RippleNet provides these payments oriented businesses, on-demand liquidity that fuels faster, affordable, and efficient services.
Ripple uses its native altcoin XRP, for its payments platforms. Its InterLedger Protocol solutions have enjoyed a lot of beneficial interest from many banks of the world, keen on embracing the benefits of blockchain technology. This affinity with banks has not been well received in the cryptoverse, giving XRP a somewhat controversial aura. The token’s decentralization has also been put to question.
This contention has nevertheless not slowed down Ripple’s executives, who have made even greater forays into banking territory, establishing relationships with central banks. In the ongoing US Congress onslaught against Libra, Brad Garlinghouse has written to Washington asking for leniency in its approach to crypto.
In his open letter, the Ripple CEO praised central banks and their monetary policy, the very thing crypto was designed to counter. Brad Garlinghouse said:
“We don’t take for granted the vital role of central banks in issuing currencies and setting monetary policy in concert with the complex dynamics of economies around the world. For centuries, governments have been well suited for the job because paramount to the acceptance of any currency is trust.”