Digital Payments Are Going Beyond Blockchain

At a Glance

  • Ripple Labs' Treacher says Blockchain a "partial solution"
  • Tells CME Group's Tech Talk payments technology is on the cusp of revolution

If you were to take a time machine, the docks in London around 1900 would have been swarming with waterside workers offloading cargoes in all shapes and sizes – barrels, tea chests, bales and anything else that would fit into the hold.

Fast-forward 50 years and the world of cargo was revolutionized by container shipping; standardized boxes that could be offloaded through automation using less than half the manpower.

For Marcus Treacher, Global Head of Strategic Accounts at Ripple, the international payment system is standing at the cusp of this kind of revolution.

“Economists attribute the 700 percent growth in global trade from 1950 to 2000 to this very simple invention,” he says. “Looking at international payments, we think that it’s very similar to the trade world around 1900.

“It’s very unstandardized and the way money moves across borders is much more cumbersome and difficult than the way fiat currencies move within individual countries.”

Calling it the Internet of Value, Treacher told CME Group’s Tech Talk 5.0 in London that companies today are looking for payment capabilities that are immediate, can deliver at a very high volume and at a very small cost. They also need to be governed and controlled accurately and easily.

“The newer industries that are developing around digital for example – the Amazons, the Ubers, the Alipays – require a much higher volume of payment across border at a much lower cost at a much higher capacity than current services can provide,” he says.

Read More: Ripple Labs and the Internet of Value

While Blockchain – the public ledger of all Bitcoin transactions – has offered a partial solution to freeing up international payments, Treacher say it only goes part of the way.

“To create a truly 21st century method of moving funds worldwide, Blockchain is not good enough,” he says. “You have to use blockchain thinking and technology but in a very different way.”

Ripple has worked on the concept of an inter-ledger – the idea of using a standard protocol to connect ledgers together. While it has a lot of the distributed ledger and cryptographic technology thinking of Blockchain, the process no longer concentrates on a single Blockchain that connects international payments and banks.

“What we wanted to do was connect the banks directly but with nothing central – we needed to go beyond Blockchain,” Treacher says.

It’s a system that Ripple believes has the potential to open up and democratize the movement of funds.

“The 2.5 billion people who are excluded from the banking system will be much more easily connected to this world with a system of connected inter-ledgers.”


Peter Shadbolt is a writer based in London.

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