A Monetary System without Borders

Posted | 04/10/2018 / Views | 4607
Back to News
Next Article

News of the last couple of days has highlighted the expense of the current international payment system and the bright future ahead with blockchain technology.  The Australian Treasurer announced the ACCC is to investigate the exorbitant fees, some $2b every year, that Australian’s pay to transact overseas.  From news.com.au:

“A customer of an Australian bank who travels overseas and spends $5000 on their credit card can expect to incur $140 in foreign exchange transaction fees,” Mr Frydenberg said.

“If a customer was to transfer $1000 overseas, it would cost an Australian on average of around $80 in fees and exchange rate mark-ups,”

The problem is the current system, archaic as it is, will be hard pressed to bring down fees and speed of transactions in any meaningful way.

Yesterday we heard news of the deal where the world’s biggest crypto exchange, Binance with over 10m users, has invested $3.5m into our friends at TravelbyBit.  The deal will see the 2 work together to install point-of-sale payments systems using their blockchain technology into major airports all around the world.  Crypto doesn’t care where you are, is internationally agnostic so you don’t need a different currency for each country, and it is peer to peer so it doesn’t accrue all those fees and time as it passes from bank to bank to bank.  We spoke earlier in the year of Brisbane Airport being the first airport in the world to adopt this technology and this deal helps that spread to the rest of the world.

Earlier in the week, and fresh after our article on the pending announcement here, Ripple has announced it officially has xRapid (using XRP) commercially available and in use with financial institutions.  

“In 2018, RippleNet has dramatically expanded its reach and network. This year we’ve seen massive customer growth quarter over quarter, signing an average of two production customers per week. RippleNet has also become a truly global network, powering faster, cheaper and more transparent cross-border payments to over 40 countries and six continents. Today, RippleNet takes another step forward to change the way money moves.

RippleNet is now providing on-demand liquidity to financial institutions for cross-border payments using the digital asset XRP. xRapid, the Ripple product powering these transactions, is commercially available and moving into production with multiple customers, including MercuryFX, Cuallix and Catalyst Corporate Federal Credit Union.

xRapid eliminates the need for a pre-funded nostro account when executing a cross-border payment. It sources liquidity from XRP on exchanges around the world. As a result, cross-border transactions occur in minutes and at a lower cost compared to traditional methods, which take days and incur high foreign exchange fees.”

Should you have BTC, LTC, or ETH and want to spend it on bullion using the TravelbyBit platform, as a merchant with TravelbyBit you can do so at Ainslie.  Also this announcement will see Binance’s native coin, BNB also available for use.

These are just a couple examples of the real world use of blockchain technology disrupting the old way.