On September 6, SBI Japan Cryptocurrency Branch, a subsidiary of SBI VC Trade, SBI Remit, announced a partnership with Ripple and SBI Ripple Asia. SBI Ripple Asia is a joint venture between SBI Holdings and Ripple.
What new opportunities will this event open for the remittance market to Vietnam? Let's find out with FinFan through the following article.
According to the announcement, the company will use XRP cryptocurrency for international remittance payments, starting this September.
The official release announces the service will only be available for bank accounts in the Philippines, Vietnam, and Indonesia. The company notes that these countries have a significant number of remittances flowing into bank accounts.
When a user initiates a transfer request, SBI VC Trade sends an equivalent amount in XRP. The cryptocurrency is then converted into the recipient's currency upon receipt.
As in the article “Remittances to Vietnam - What can we see after the conference on the afternoon of May 22 in Ho Chi Minh City?” There are details about the constantly increasing volume of remittances to Vietnam (despite the pandemic and the dual economic crisis).
However, the time for parties to transfer and receive remittances has not been significantly improved. Although a number of new tools to help transfer money directly from foreign bank accounts to Vietnam have been launched such as Remitly, Paysend, SentBe, and have been doing very well at the above task to optimize money transfer time as well as the cost for the sender and receiver, it takes up to 3 working hours to transfer money to the recipient.
With the impact of blockchain technology and converted into XRP as above, the money transfer will take place in less than 1 minute for the recipient's account to receive the remittance amount.
The main reason for this improvement in transfer speed lies in the decentralization of XRP as it is created by blockchain technology.
Blockchain and cryptocurrency have been growing rapidly in Southeast Asian countries for a long time. However, for reasons relating to economic crime, many governments in this region do not have established legal structures in place to accept and enable these currencies to circulate on the market.
SIB Japan's adoption of XRP for remittances will promote the rapid adoption of cryptocurrencies in transactions, which in turn will be able to further speed up the speed and cost of cross-border remittances between Southeast Asian countries or this region with other nations.
The event of SIB using XRP for cross-border payments to Vietnam will open up new opportunities for money transfer services to this country to have a new money-making segment.
Instead of transferring money the old way, from bank to bank or directly to e-wallets. Now, these services can follow in XRP's footsteps to update their services to match the trend and increase money transfer speeds.
They will rely on intermediaries like Ripple to be able to convert money from one country to some type of CBDC or stablecoin, before being converted to fiat and transferred to the recipient's bank or e-wallet.
This seems to cost them an extra intermediate step. However, thanks to that intermediate step, the money transfer time will be faster because the system of stablecoins created by blockchain technology with decentralized properties and high accuracy will be able to support these money transfer services to speed up the cross-border transfer process between sender and recipient.
In short, Japan's SBI accepting the use of XRP will open up many opportunities for overseas remittance technology companies that want to transfer money to Vietnam, as they can follow this giant to cooperate with a party that specializes in converting crypto to fiat.
But, choosing a trustworthy partner is essential, otherwise, you will have those partners appropriate your prefund money for other purposes and damage the company's reputation.
If you have not found a partner to trust, please contact FinFan immediately for more advice on support services for transferring money from abroad to Vietnam (receiving crypto as well).
With more than 10 years of experience in the field of remittance transfer, we are confident that we will be your reliable partner. Along with that, we also provide a Credit Line service to support your prefund with extremely preferential interest rates. Contact us immediately via LinkedIn channels, website and fanpage to get more advice about the service.