The European Central Bank (ECB) has just launched a fast international payment technology called Target Instant Payments System or TIPS.
TIPS aims to offer instant low-cost solutions in euros for customers across the continent. Euro area customers will have access TIPS at any time of the day or night to enjoy easy and safe payments – similar to Venus in the United States.
Some consider this as the beginning of the end for cryptographic assets: centralized institutions are responding to the challenges posed by the crypt and are beginning to act. Others, however, see it as promising for cryptography.
Anirudh VK at AMB Crypto recently discussed the problem. Anirudh sees the launch of TIPS as a good thing for cryptocurrency and decentralization. In fact, it could be a turning point for Ripple's various payment technologies.
The reason is simple: there are signs that TIPS could implement Ripple technologies like xCurrent, xVia and xRapid in the future. The first two are powered by Ripple, while the third is powered by the XRP digital token. TIPS may use some or all of these technologies to facilitate international low-cost payments.
How do TIPS work? Why is it similar to Crypto?
TIPS works similarly to payment platforms such as Ripple & # 39; s xCurrent.
With TIPS, payment service providers are obliged to set aside part of the liquidity in the central bank of their country. This liquidity will be used to settle payments instantly without waiting times, 24 hours a day and 365 days a year.
The end-to-end processing time from the start of the transaction to the end is expected in 10 seconds or less. The system already has plans to scale effectively to meet the needs of users.
Why do we need suggestions?
TIPS's purpose is simple: banks in Europe have witnessed the emergence of all the different types of payment platforms and transfer technologies. He was creating a fragmented mess of systems that did not interact well with each other.
TIPS has been designed to solve this problem. Here is how Benoît Cœuré, a member of the ECB's board of directors, described the benefit of TIPS in an intervention at the start of this year:
"In fact, in the euro area, where different legal frameworks and customer habits prevail, there is always the risk of a new fragmentation deriving from the development of national or closed-circuit solutions that are not interoperable. To counter this risk, the European payment industry is launching a truly pan-European instant payment system. "
TIPS was designed to be the ideal pan-European instant payment scheme.
TIPS can use payment technologies based on Ripple and XRP
As pointed out by Anirudh VK at AMB Crypto, TIPS is likely to use payment technology based on Ripple or XRP technology in the future.
The reason is that Ripple has partnered with TAS Group. In fact, Ripple and TAS Group have been important partners with each other over the past three years.
The TAS Group has several important partnerships with banks in Europe. The company serves as a business innovation specialist for banks across Europe, offering electronic money, payment systems, capital markets and extended business solutions to customers across the continent.
Here's where things get interesting: the latest version of TAS Group of the Bank Liquidity Management platform has been specifically designed to offer maximum interoperability with the TIPS payment standard. Banks can use the TAS Group Bank Liquidity Management Platform to seamlessly switch to the new TIPS payment protocol.
Ripple, meanwhile, is doing its part to facilitate a seamless transition. The payment technology company is implementing an open API that can connect Ripple networks with the new platform.
In addition to the open API, Ripple's existing technologies could play a crucial role in the continuation of European banking activity. XVI bisfor example, it facilitates cross-border interoperability between financial institutions, while xCurrent is already used by many major international financial institutions.
Meanwhile, XRP-based xRapid technology was also implemented with banks in 2018.
SUGGESTIONS It's not the end of Crypto: it's just a new opportunity
Ultimately, some see the launch of TIPS as bad for crypto. Others see it as an opportunity. TIPS can rely on existing cryptographic payment technologies to facilitate low-cost cross-border payments.
Stay tuned to see if TIPS integrates XCurrent, xVia or xRapid technologies in the future.