Digital Transactions Authoritative, insightful and timely information for payments professionals
While entities such as the Federal Reserve and the automated clearing house work out methods for faster payments, financial institutions are also investigating the blockchain for real-time money movement. That concept took a step toward reality with an announcement Friday by Spain’s BBVA that it had completed what it says is the first commercial money transfer across borders using blockchain technology.
The transfer, which relied on newly developed distributed-ledger technology from Ripple Labs Inc., a San Francisco-based developer of cryptocurrency systems, took place between Mexico and Spain using what the bank called “BBVA infrastructure.”
The blockchain, which serves as the backbone of Bitcoin and other cryptocurrencies, is a digital ledger that allows users to record and track transactions in real time. The cross-border remittance involved what BBVA called “real money” and cleared in a matter of seconds, compared to what the bank said is the typical clearing time of up to four days for international transactions.
No further details about the remittance itself were immediately available, though BBVA said Ripple’s technology will offer benefits beyond swifter clearing times. It will also allow clients to get a clearer view of transaction costs and track payment status. “The application, developed with support from Ripple’s solution, is a clear indicator of how BBVA’s international payments service could evolve in the future,” says a BBVA press release.
BBVA officials applauded the successful completion of the transaction. “This pioneer initiative is a clear demonstration of how payment processes can be vastly improved through the implementation of emerging technologies,” said Alicia Pertusa, head of digital transformation in investment banking at BBVA, in a statement.
The transaction also marks an important milestone for 5-year-old Ripple, which has raised $93.6 million through seven funding rounds since its founding. “We are very excited that BBVA, one of the most tech-forward banks in the world, has joined the Ripple network to transform their cross-border payments,” said Marcus Treacher, global head of strategic accounts at Ripple, in a statement. “While others are content to merely experiment with blockchain, BBVA is working with us to move real money.”
