Case 50: Blockchain Can Enable New Forex Solutions

Case Study: Ripple

Several companies are working on developing Forex solution based on blockchain technology, such as Ripple, Stellar, and Coinbase. At the time of writing, the platform created by Ripple seems to show the most potential for further growth. They are all developing
platforms based on partnering with payment service providers (PSP) in different jurisdictions to act as gateways to their ledger network. The gateway holds the fiat currency as collateral, and creates a digital version of the currency on the network. These gateways can then trade in real-time with each other, either directly or through ‘market makers’. These will typically be FX companies.

Ripple’s goal is to connect the world of money much like email does for communication and they have been steadily growing since their inception in 2012. Ripple partnered with the German bank Fidor AG in 2014 to use its platform for both interbank transactions and intrabank transfers with its own subsidiaries overseas, and later started working together with Santander for the same purpose.

In the start of October 2015 they announced that their experimentation had borne fruit, and that they were ready to deliver enterprise-grade solutions for both FX market making and real-time settlement. Having raised more than $32 million in Series A funding Ripple plans to grow and add more bank partnerships in the near future. There have been strong indications that key Nordic financial institutions are experimenting with the Ripple network, and are considering a partnership.

Incumbents participating in solutions


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