Ripple is launching a new version of its most popular product, xCurrent.
Positioned as a rival of SWIFT – the forty-five messaging network at the heart of the global payment infrastructure – xCurrent version 4.0 is more tightly integrated with Ripple's other major offer, xRapid.
xRapid uses XRP cryptocurrency to deliver what the company calls "on-demand liquidity" in cross-border transactions: the ability to use XRP as a bridge currency in the middle of a cross-border payment corridor, which Ripple says eliminates payment processors " need to pre-fund bank accounts in the destination countries.
Describing xCurrent 4.0, Product SVP Ripple Asheesh Birla told CoinDesk:
"What this release allows you to do is that in the countries where you think it's appropriate and available xRapid, using your xCurrent software, you can now take advantage of on-demand liquidity using xRapid."
The launch of xCurrent 4.0 began in September, a company spokesperson told CoinDesk, and customers – including American Express, Santander and Itaú – are currently in transition to the new version.
Birla did not provide an exact timeline for completing updates – he noted that xCurrent is an "on-premise software package", which means it is tailored to each customer – but said that all new customers will start with the version 4.0.
Yet the integration of xRapid, Birla underlined, is entirely optional.
"In other countries, where there is no good regulatory authorization or a digital resource infrastructure, we continue to use xCurrent as it is, with fiat liquidity," he said.
So far, a spokesperson for Ripple has told CoinDesk that no xCurrent 4.0 user has opted for xRapid integration.
CoinDesk has contacted several Ripple customers about the new version of xCurrent. A spokesperson for BBVA said the bank had tested a Ripple product last year, but refused to specify which one or provide an update.
Ovidio Cordero, head of corporate communications at Banco Santander, said the bank "only uses xCurrent, not xRapid or XRP, and the bank has not updated until now." He added that "today Santander it does not need updates to offer all the benefits of One Pay FX ", a mobile payment app.
Ripple announced in October that three companies – MercuryFX, Cuallix and Catalyst Corporate Credit Union – were implementing xRapid for commercial payments.
According to the existing system, Birla said that financial institutions can take months to create bank accounts in foreign countries and finance them with a local currency sufficient to provide liquidity.
With xRapid, companies exchange their home country currency for XRP and then use XRP to buy the currency of the destination country. "Feedback so far from our customers," he said, "is using xRapid that reduces costs, but also reduces installation time."
Independent market makers on cryptocurrency exchanges are required to provide liquidity for these transactions. Ripple has partnered with three grants – Bittrex, Coins.ph and Bitso – to facilitate xRapid payments between US dollars and Philippine pesos, US dollars and Mexican pesos.
"They are two of the biggest payment destinations, and they have good infrastructure," said Birla from Mexico and the Philippines, adding that "we have chosen those to start and we want to go from there".
Multi-hop and bulk FX
However, the new version of xCurrent offers benefits to customers who have not chosen to integrate xRapid.
Among the most important improvements in xCurrent 4.0 is a feature called "multihop", which allows you to forward payments through a chain of xCurrent users. The existing payment system is based on some large banks of monetary centers such as Citi, which serve as hubs, Birla said.
Multihop could allow smaller regional players such as Siam Commercial Bank in Thailand to "get the same type of coverage that a larger matching bank can," he added.
Given the compliance problems of financial institutions, every "jump" along the chain should be approved in advance – "there is never anything like it," surprise! "" Birla said – but once the software has been installed and implemented, the same jumps happen "in milliseconds."
Another improvement, which is specifically aimed at customers who do not opt for xRapid integration, is known as "bulk FX" (abbreviation of foreign currency). This feature allows customers to buy fiat currencies in bulk, allowing them to pre-finance foreign bank accounts all at once and provide customers with a constant exchange rate.
A third function, known as "forward forward forward", links xCurrent to local payment guides, such as ACH and its equivalents. In this way, contrary to SWIFT, financial institutions are more able to verify that the payment reaches the final recipient.
Finally, the new version of xCurrent includes updates to the user interface that Birla said that would make the configuration of the software less confusing.
xCurrent 4.0 includes a number of improvements, but cryptocurrency investors pay attention primarily because the improved xRapid integration could increase the adoption of XRP by the institutions.
In the first two months since the introduction of the new version, however, no new company has publicly adopted a product that promised "on-demand liquidity".
Ripple CEO image of Brad Garlinghouse via Ripple / YouTube