Ripple “very confident” of entering Chinese market this year

in #crypto7 years ago

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Ripple is “very confident” that its blockchain-powered payments solutions will have some traction in the Chinese market by the end of this year.

The company is in informal talks with regulators, banks and payment providers with a view to initially launching its XCurrent software in China, which allows banks to instantly settle cross-border payments with end-to-end tracking, but which doesn’t use cryptocurrency.

In an interview with GTR, Ripple’s head of government and regulatory relations for Asia Pacific, Sagar Sarbhai, confirmed that the lack of regulatory clarity around blockchain and cryptocurrency in China has thus far delayed its market entry, but said that the company is hoping for progress soon.

“This year you will see more announcements coming in on China, in terms of educating and differentiating us from some of the other cryptocurrencies that are out there,” he said, adding that “as we speak, our team is strategising about entering the market, but it’s still very early days”.

Last year, Ripple CEO Brad Garlinghouse told GTR that a launch in China was imminent, but this appears to have been delayed.

“We’re trying to get some regulatory clarity, we’ve started engaging informally with banks, FIs and payment providers, speaking to regulators and government bodies, trying to educate on what Ripple is and what our vision is,” Sarbhai confirmed.

The company recently partnered with Hong Kong-based money transfer company LianLian, which will see LianLian process real-time invoice and e-commerce payments on behalf of businesses using RippleNet, Ripple’s payments network. This gives it access to the inbound payments market to China, but it is still not present in Mainland China.

Despite this, Sarbhai says he is “very bullish” on China and that the country forms an important part of an aggressive strategy for Asia Pacific.

“In Asia Pacific we already have live clients in Japan, India, Thailand… We’re in active discussions with almost all the countries in Asia Pacific and are finding one bank almost every week,” he said.

As part of this, it partnered with 61 Japanese banks this month to develop a payment app to settle transactions instantly. Money Tap will be available with SBI Net Sumishin Bank, Resona Bank and Suruga Bank, before being rolled out to the rest of the banking partners.

Other issues pertaining to entering the Chinese market may be Chinese capital controls, which have in recent years limited the amount of capital institutions can repatriate or transfer cross-border from China, as well as the potential trade war between China and the US.

As GTR reported recently, US fintech companies are potentially vulnerable to trade actions between the world’s largest two economies, as evidenced when in January, the US government blocked the US$1.2bn sale of MoneyGram to Alibaba’s Ant Financial platform.

Sarbhai says that in his dealings with Chinese regulators, this is not an issue that has arisen.

“In our discussions with China’s regulatory bodies so far, this is something that hasn’t come up. We’re essentially a software company, licensing software to banks and enterprises who want to move money cross-border.

“If a Chinese bank wants to use our solution and the regulator sees no risk with the solution, I don’t see why the government, even in a so-called hostile environment, would have any issue with that. But this is early days in what you call the trade war and hostile environment,” he says.

Sarbhai also refuses to rule out hosting another rival event to this year’s Sibos, which will be held in Sydney in October. Ripple stoked controversy by organising a simultaneous event to Swift’s flagship conference in Toronto last year. A fleet of Ripple-branded cars was parked outside the Sibos venue throughout the week, ready to ferry people back and forth between the two events.

“Our events team is planning something but we haven’t yet finalised the location yet. In the next couple of months we’ll announce the location,” he says, adding that it is not Ripple’s intention to poach Swift clients.

“I don’t think it was a strategy to poach customers, it was just that it gave us a good platform as the entire financial services space was in Canada at that time. It made sense instead of having two separate events. A lot of our clients are common to the Swift network. A lot of our clients use both Ripple and Swift, it was a logical decision to make sure we get them at our conference at that moment in time,” Sarbhai says.

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