The Commonwealth Bank of Australia (CBA) plans to begin using the Ripple network to settle payments between its subsidiaries soon.
Commonwealth Bank chief information officer David Whiteing revealed the large bank’s interest in Ripple technology yesterday during a speech at an event hosted by the Australian Information Industry Association (AIIA).
Technology news outlet CIO reported Whiteing said, “Bitcoin is a protocol which is now being replicated by non-asset based vendors like Ripple and others. We absolutely see that’s where it’s going to go. The bank has a role to play in that.”
“As a result, we have done a whole bunch of experiments with it. We are about to launch using Ripple as a means to transfer payments between our subsidiaries.”
Commonwealth Bank’s mobile app already features multicurrency bank accounts, which he noted supports up to 15 currencies, and that it wouldn’t be hard to add loyalty points or digital currencies to it.
“It shouldn’t be that difficult for us to then add cryptocurrencies to it and whatever other means of payment transfers people might want,” said Whiteing.
Whiteing, who became CBA’s CIO last year, has been leading the bank’s efforts to innovative. As highlighted in his speech at the AIIA event, CBA is exploring the many new trends in the banking industry. Their mobile banking app already is used by 3.5 million of Commonwealth Bank’s 11 million customers and is something the bank is putting a lot of resources into to developing. CBA is also considered to be part of the “big four” Australian banks, alongside National Australia Bank (NAB), ANZ and Westpac.
When contacted by Bitcoin Magazine, a CBA spokesman confirmed the bank has been experimenting with Ripple and added that Commonwealth Bank will continue to test “crypto protocols” and soon “begin a wider experiment with one of our offshore subsidiaries to explore the benefits of interbank transfers using these protocols. The idea is to test in a controlled environment what a bank-to-bank internal transfer might look like using crypto rather than existing payment providers.”
The spokesman also stressed that use of Ripple’s payment network will stay within the Commonwealth Bank Group and they will continue “to comply with all legal and regulatory requirements.
The news comes a week after Ripple Labs announced a $28 million series A funding round and a pivot to institutional use cases. Previously, the digital currency startup aimed to leverage its payment network for cheaper and more efficient remittances but now, Ripple Labs is focusing its efforts on “correspondent banking, domestic transfers and corporate treasury” applications.
Ripple Labs previously announced partnerships and pilots with several financial institutions, including global remittance provider Western Union, but according to Ripple CEO and founder Chris Larsen, there are many more that haven’t yet been publically announced.
In an interview on the BreakingBanks Radio Show with guest host Chris Skinner, a fintech author and founder of the Financial Services Club, Larsen said, “We have about 30 partners in various stages of proof-of-concept, pilot and production. We have to respect when our partners want to announce they are using our infrastructure. We are very, very excited and pleased with the uptake we are seeing.”