Ripple Labs, the developer of the XRP cryptocurrency and the RLUSD stablecoin, are teaming up with Mastercard, the US bank WebBank, and the crypto exchange Gemini to test using the RLUSD stablecoin to settle fiat credit card transactions over the XRP Ledger blockchain.
In a pilot program, WebBank, which is the issuer of the Gemini Credit Card, will explore settling Mastercard transactions using RLUSD on the XRP Ledger blockchain. If implemented, this would be one of the first instances of a regulated US bank settling traditional credit card payments using a stablecoin on a public blockchain.
“The goal is to bring blockchain speed and efficiency into the back-end of a payment flow consumers already know — swiping a credit card,” said Monica Long, Ripple’s president.
If implemented, this could eventually replace slower and more expensive settlement rails that banks rely on today – namely the outdated SWIFT system. Transactions and payments would be settled nearly instantly for nearly no cost.
Mastercard, which has explored stablecoin payments before, said the project is part of its broader effort “to integrate regulated digital assets into its global network”.
A game changer move by Visa?
Meanwhile, Mastercard’s rival Visa is also shifting to the blockchain and is set to roll out support for four crypto stablecoins across four unique blockchains: Ethereum, Solana, Stellar and Avalanche. Some analysts are saying that Visa’s exploration of digital assets for cross-border payments “could be a game changer”.
As reported by thePayments Journal:
“[This] marks the first adoption of a stablecoin by a major payment rail that already processes the lion’s share of international transactions…By treating stablecoins as equivalent to funds on deposit, buyers and sellers can enable instant payouts without leaving capital tied up across multiple currencies until needed.”
Interestingly, stablecoin settlement volumes surpassed Visa and Mastercard’s settlement volume combined last year, as noted by a crypto analyst at Javelin Strategy & Research.
“SWIFT and Mastercard’s blockchain solutions show us that these new rails are where it’s all headed—normalizing tokenized dollars for cross-border payments. But it will take some time to build it all out.”
Solving real world problems
As for XRP and Ripple Labs, they are solving real world problems. XRP has lighting fast speed – transactions setltle in about 3 seconds for less than a penny. This speed and low cost make XRP perfect for big players like banks sending money across borders. Companies like MoneyGram have already used XRP to send tes of millions of dollars this way, proving this system works. In Japan, SBI Remit sends money to places like the Philippines using XRP, while in Africa, fintech Flutterwave helps businesses pay globally with XRP’s help. Ripple also works with banks and governments, like the Dubai Land Department, to use XRP for real world assets such as real estate deals.
Like a stock, XRP’s value comes from doing its job: making global payments smoother.
As reported in a thought piece by 24/7 Wallstreet:
“XRP isn’t trying to replace Bitcoin as a store of value — it’s aiming to be the backbone of international finance.”