Biz Builder Mike

You can't sail Today's boat on Yesterdays wind - Michael Noel

Cross-Border Payments are on the “Cusp of Transformation” According to Executive from Fintech Ripple

by

Marcus Treacher, the SVP of Customer Success at American Fintech Ripple, notes that the world’s cross-border payments market is highly fragmented. But he claims that international transactions are now being redefined by “the power of ISO standardization” and the innovative technology approach of RippleNet, which is a “decentralized” network of global financial institutions that are conducting transactions through Ripple’s payment networks.

Treacher reveals that cross-border payments are “on the cusp of transformation.” He claims that blockchain or distributed ledger technology (DLT) and digital assets such as XRP can potentially offer a more “frictionless” global payments solution.

He notes:

“At Ripple, our mission is to remove friction from global payments and enable money to move the same way that information does today—digitally and instantly. We work with banks and payment providers to modernize legacy systems using blockchain and digital assets to make sending money around the world easier, faster and more reliable.”

He adds that Ripple’s goal is to offer real-time connections to RippleNet to banks and payment service providers. Treacher confirms that RippleNet follows the ISO2022 standard, allowing these organizations to send and receive funds on behalf of their clients and also between each other “immediately, with finality and transparency.” He claims that funds can be transferred quickly regardless of how much money is being sent or the currencies being used.

Treacher also mentions that being able to send money quickly across borders is not the only problem we need to address. He explains that funds must go to the intended or correct accounts in the right country and “at the right time to allow payments to actually flow.”

He adds:

“This need to pre-fund accounts is called the Liquidity Problem, and is one of the causes of hold-ups with cross-border payments. … Ripple has developed … On-Demand Liquidity (ODL) which uses … XRP to enable funds to be sent to destination accounts immediately – literally on-demand, rather than days beforehand.”

He claims that XRP is quite useful for conducting faster cross-border payments. It makes the process more affordable and overall more efficient, Treacher says. He explains that XRP is meant to serve as a bridge between two different fiat currencies, which should ensure that funds are transferred and received “in a given geography’s or user’s local currency instantaneously.”

He claims RippleNet is able to reduce the settlement period on international payments from 3 business days to only 3 seconds, which makes the process “truly frictionless.”

Treacher says that the crypto-asset market has been dominated or monopolized by high-net-worth individuals and “crypto enthusiasts.” But he claims that there are now an increasing number of indicators that show that institutional investors might be entering this market. He confirms that crypto markets recently set all-time highs in futures contracts’ open interest.

He points out that 60% of insitutions responding to Fidelity’s survey said they’d consider allocating a certain percentage of their porfolio to digital assets. He claims that this is a significant number when we consider the survey was completed before the COVID-19 outbreak. While not specifically mentioning Bitcoin (BTC), which Ripple considers a major threat and competitor to its business, Treacher notes that digital assets have been performing as well, if not better, than precious metals like gold.

He argues that banks and other financial service providers that are able to bring cross-border payment methods “into the modern world and provide a truly frictionless experience that reduces the many pain points consumers are facing today will emerge as leaders in tomorrow’s global payment industry.”

It’s true that Fintech firms like TransferWise are providing reliable and cost-effective ways for individuals and businesses to transfer funds, globally. Meanwhile, Bitcoin (BTC) has emerged as an increasingly popular way to transfer digital value in a peer to peer and permissionless manner.

However, Ripple has been the subject of several major lawsuits, with many XRP holders alleging that the company has been driving down the token’s price by selling large quantities of it, so that it can fund its business operations. During the past few years, the XRP market cap had briefly overtaken Ethereum (ETH) to become the second-largest digital asset by market share, trailing on Bitcoin (BTC).

But Ethereum’s market cap has now surged past the $40 billion mark, while XRP has dropped to fourth place (behind Tether’s USDT) with a market cap of only around $11 billion. While it’s true that Ripple has entered some notable partnerships, such as with MoneyGram, it remains unclear why a token like XRP is necessary when trying to send cross-border payments.

Source

Canada based Middle Eastern Restaurant Converts Entire Cash Reserves to Bitcoin (BTC) following COVID-19 Outbreak and Resulting Challenges

by

Ontario, Canada’s Tahinis Restaurants, which claims to be the world’s best Middle Eastern restaurant, revealed that it has converted its entire cash reserves into Bitcoin (BTC), the flagship cryptocurrency.

The company explained that it experienced significant challenges during the historic market crash in March 2020, following the COVID-19 outbreak. They noted that it was quite tough on them and people, in general, had been scared to go out to eat. 

The restaurant owners revealed that they were forced to part ways with their partners and employees. They also claim that they were working around the clock to maintain their operations.

They noted that they were able to keep their business going, with a lot of hard work and dedication, however, they were faced with “one big problem.”

The Tahinis Restaurants team revealed:

“The government assistance programs in Canada made it very hard for us to bring back our partners (employees) as they were making more money staying at home and not working. All of a sudden we went from an economic crisis to everyone having a lot of money Including us.”

They added:

“Our Cash reserves swelled and business was booming again. But it was apparent to us that cash didn’t have the same appeal. That eventually with all the excess cash circulating the economy that cash would be worth less.”

The restaurant owner claims he’s been an active investor and that he discovered Bitcoin (BTC) and thought about investing in the digital asset on several occasions. However, he never gave it much attention because of people like billionaire Warren Buffett who had referred to cryptocurrencies as “rat poison” and has said that he’s certain they will have a bad ending.

But with the passage of time, he realized that Bitcoin would make a worthwhile investment, because he had been reading and researching about how it works.  

He notes:

“I view Bitcoin as a true free savings technology that stores wealth across time and space. And it [became] apparent to me that there is a game of musical chairs being played right now and the music will stop and some people will get left out…as a company, [we] decided to store all of our excess cash reserves into Bitcoin as it offers a much better alternative to saving cash. We will continue to do that over the coming years and maybe forever if we don’t have a need for the fiat.”

It seems like more people are becoming aware of Bitcoin (BTC) and other cryptocurrencies, according to a recent survey from US based Bitcoin ATM provider, CoinFlip – which reveals that one in five Americans or 20% of them have purchased digital currencies.

More than 1,000 Americans were asked various questions about cryptos.

An increasing number of consumers said they now prefer to use crypto to pay for goods and services.  About 14.5% of US residents, responding to the survey, said they knew or were aware of three or more cryptocurrencies other than Bitcoin

Around 44% said they bought cryptos from an exchange, meanwhile, Bitcoin ATMs or in-person transactions were the “second-most-popular” options at about 28%, the survey revealed.

The CEO at crypto firm BitGo recently recommended allocating 3% of portfolios to Bitcoin, after a Nasdaq listed firm acquired $250 Million in BTC as its “primary reserve asset.”

While Bitcoin might be emerging as a legitimate or widely-used asset, it’s worth noting that cryptocurrencies remain highly volatile and there are many scams being carried out in this space. Historical data confirms that diversifying one’s assets instead of completely allocating to one type of asset is almost always a better idea. In other words, don’t keep all your eggs in one basket.

Source

Greek Payments Firm Viva Wallet Is Reportedly Planning to Secure €500 Million to Support Digital Banking Business

by

Greek payments firm Viva Wallet is reportedly planning to secure €500 million in capital to support its virtual banking business, according to Reuters which cited two sources familiar with the matter.

As reported, Viva Wallet officially acquired the banking license of Praxia Bank after the completion of the share purchase agreement between AMC Oak (Shareholder) and Viva Wallet Holdings (purchaser).

The Athens-based firm has appointed Jefferies to advise on the €500 million (appr. $592 million) raise which aims to offer investors stakes in a newly established legal entity that is expected to take over Viva Wallet’s existing banking loans (according to the sources).

The sources noted:

“Viva wants to be a neobank without a loan book.”

They claim that the suggested deal has been approved or given the green light by European regulatory authorities. If the deal is finalized, it would offer a new way for smaller European banks to manage their loans. This could make it easier for them to conduct business and raise funds.

Established in 2005 by company CEO Haris Karonis, Viva Wallet intends to sell loans on its books to a special purpose vehicle (SPV) within 1 business day or 24 hours from finalizing deals with them. This should remove or lower the risk from the bank’s balance sheet, the sources said.

This newly proposed structure shows how Greek financiers have reevaluated or reassessed traditional bank funding models, after the nation’s historic debt crisis. We might see more of these new financing methods, due to the COVID-19 outbreak and resulting economic challenges.

Viva Wallet provides cloud-powered payment services in 23 different European countries. It supports payments in euros, the British pound and the Romanian leu.

In January 2020, Viva revealed that it had entered a deal to acquire Greece based digital challenger Praxia Bank, which is owned by Barclays’ former CEO Bob Diamond and David Schamis, a partner at Atlas Merchant Capital.

The acquisition of Praxia Bank was approved by the Bank of Greece this month, according to the sources.

Source