Six global banks have formed a standards-setting group for using distributed ledger technology developed by Ripple.
The Global Payments Steering Group intends to collaborate with Ripple to create and maintain rules for payment transactions, formal standards and other actions to help financial institutions implement distributed ledger technology.
At launch, the group consists of founding members Santander, whose venture capital arm invested $4 million in Ripple last year, Bank of America Merrill Lynch, UniCredit, Standard Chartered, Westpac Banking Corporation and Royal Bank of Canada. CIBC also plans to join.
“This represents the first time that major banks have formulated policies to govern the transfer of money across borders using blockchain,” Donald Donahue, chairman of the steering group and former president and CEO of the Depository Trust & Clearing Corporation, said in the release. That’s different from blockchain standards-setting consortium R3 CEV, which is more focused on the benefits of the technology for capital markets. Banks in the GPSG are also past the experimentation phase and are beginning to implement blockchain technology for cross-border payments.
Distributed ledgers have moved into the payments and financial services limelight for their ability to reduce transaction settlement times and cost and enable high-volume and low-value transactions.
Ripple, which closed a $55 million Series B funding round last week, has grown its global network to include 15 banks, 10 in commercial deal phases and more than 30 that have completed pilots. Ripple is also on the Federal Reserve’s Faster Payments Task Force Steering Committee and co-chairs the W3C’s Web Payments Working Group.
“Today, people expect money to move at the speed of the Internet. That’s why we’re working with these top banks to address the need for faster cross-border payments,” Chris Larsen, Ripple cofounder and CEO, said in a Sept. 23 news release. “The work of GPSG, a new global interbank network, will give financial institutions and their customers the ability to make new types of payments at mass scale.”