The rise of Ripple in the global remittance market is putting excessive competitive pressure on the Indian banks. A report by consultancy firm Ernst & Young states that blockchain-based Ripple payments, particularly in the remittance and cross-border sector, can increase the competition for Indian banks.
The report has been prepared for the Competition Commission of India, a government of India body. Blockchain-based technologies have established themselves as superior in the cross-border and remittance realm, where they have significantly reduced the transfer time and fees/charges. Thus, their use has also increased exponentially, and now almost every major remittance platform employs blockchain-based technologies.
The rising use of Ripple challenges conventional banking players and traditional technologies. Indian banks are major players in local remittance realm.
Indian banks face the heat – Blockchain payments take over
The report mentions that the Indian banks and financial sector is facing severe challenges from blockchain technology. The financial realm was perhaps the first practical use-case of blockchain technology, and the solutions have transformed the entire financial industry. Traditional banks are now competing with emerging blockchain-based technologies, particularly in payments.
Ripple is cost-efficient, faster, and highly transparent. The charges to send money overseas have come down drastically. Traditional Indian banks used to charge hefty fees for remittances earlier. Now, Ripple-powered cross-border payments are challenging the traditional players.
The report further mentions that Ripple-based technologies are now used across 55 nations. The cryptocurrency is fast emerging as a bridge between central banks and other altcoins.
Ripple facing more regulatory scrutiny – Should you buy XRP?
As the use of Ripple increases, cryptocurrency is facing numerous investigations by various agencies around the world. The question about its status as security is still under debate despite multiple court rulings. The US Securities and Exchange Commission is in a prolonged lawsuit claiming Ripple to be a security. Interestingly, Bitcoin and Ethereum do not fall under the security category.
David Schwartz of Ripple says that the market considers all cryptocurrencies to be similar, and the same rules must apply to all of them. The EY report states that Indian regulators have increased their oversight of cryptocurrencies in recent years. As of now, the use of cryptocurrencies is banned in India.
Still, should you buy Ripple? Ripple has risen from $0.1742 to touch $1.4572 high in just one year. That staggering rise of Ripple shows that the real-world use of Ripple is powering its growth. Ripple is one of the premier cryptocurrencies one can purchase for the long haul after studying its potential as an investor.