Ernst & Young Report: Ripple’s Payment Solutions Could Compete Global Traditional Banking System
As per a report meant for the Indian regulators and authorities, one that also provides an overview concerning DLT (Distributed Ledger Technology), solutions such as that of Ripple might, in fact, be quite difficult to keep up with for the country’s traditional local banking system.
Despite Ripple still going up against the United States Securities and Exchange Commission (SEC), efforts for international expansion and exposure have not stopped. Most recently, Ripple had expanded by aligning itself with Tranglo in Malaysia and Novatti in Australia.
Ripple solutions may do more harm than good, according to Indian authorities
A report provided by Ernst & Young for the Competition Commission of India regarding the use of blockchain and cryptocurrency had outlined the potential strengths and weaknesses for the country to ever consider adopting such technology for implementation in various socio-economic spheres. In the report, Ripple had been named as a competitor of sorts to the pre-existing traditional local as well as international banking systems.
The report had also pointed out that despite the difficulties associated with successfully implementing blockchain technology in certain countries like India, its benefits should not be underestimated either, ranging from improving industries such as healthcare, government, human resource management, insurance, education, BFSI, and more. Nevertheless, it is also true that the moment blockchain is implemented, competition will begin with any institution which may provide a similar service that is not based on DLT. This kind of competition has, in fact, already begun in the world of cross-border payments, for example.
Various kinds of payments that are conducted on platforms utilizing blockchain tend to be much more affordable and faster by comparison too. Additionally, prefunding is not usually needed either. It is with this in mind that the abovementioned report also emphasizes the fact that Ripple might inadvertently put a lot of stress on the more traditional banking system simply because it has the potential and the capacity to replace such a structure.
SEC lawsuit may threaten Ripple’s long-term plans in the U.S
Although XRP seems to be performing relatively well given the current circumstances, with a price of $1.28 at the moment, Ripple still needs to solve the issue of the SEC lawsuit. It is true that the court has been slightly in favor of Ripple lately, but this is not guaranteed to last, nor is it an indication of a definitive Ripple victory.
It is because of this lawsuit that Ripple may be restricted in terms of what it can do within the United States itself. Many in the crypto space have continuously called for the free flow of cryptocurrencies and DeFi in the U.S, especially since the country’s rival, China, has been making leaps and bounds with its CBDC in the form of the digital yuan lately.
