Ripple superior staff, led by its CEO Brad Garlinghouse, reportedly engaged with the Central Bank of Brazil to address “institutional issues.” The online conference began together senior central bank administrators and Ripple’s team in a mind-blowing conversation that lasted several hours. Although not many details have been announced, it is rumored that the principal agenda of the conference is the possibility to examine Ripple’s remittance service for clients in Brazil.
Brazil is currently one of the most cryptocurrency friendly countries in Latin America and also a promising remittance industry. According to tradingeconomics data, total remittances increased to approximately $306 million in January 2020, the highest since 2009.
Although this has been significantly reduced to $204 million in February, probably due to the COVID-19 pandemic. However, it was projected that the industry will raise up to $275 million by the end of the first quarter.
Only traditional and expensive means of transferring funds, such as SWIFT, currently dominate the remittance industry in Brazil, although Ripple already works with some banks in the country. This may be the reason behind the central bank’s decision to consider Ripple’s payment network that settles payments across borders in just seconds for just a few cents. Ripple’s popularity with existing financial institutions in the industry can be easily explained by its technology’s ability to operate in existing networks such as banks rather than displace them.
Ripple’s Brazil office intended to create a market base in Brazil and Latin America in general. With this possible collaboration with the central bank, Ripple’s market base can finally see a real expansion, and XRP, which is used to provide liquidity, can also see wider adoption.
Brazil’s central bank president Campos Neto is known to be a blockchain enthusiast, so this can be a big step in bringing Ripple closer to his goal of making cross-border remittances as cheap and trouble-free in Brazil.