Ripple, the digital payment network, has partnered with foreign exchange company Travelex to facilitate cross-border payments between enterprises by utilizing XRP. It also noted that Travelex Bank is the first bank approved by Brazil’s central bank to operate exclusively in foreign exchange.
It has been reported that Ripple’s XRP token is set to be used to facilitate fast and cost-effective cross-border transactions in Brazil, after the launch of RippleNet's On-Demand Liquidity (ODL) with forex company Travelex.
Ripple said that while other Latin American companies such as Banco Rendimento, Remessa Online, Frente Corretora, and Banco Topazio have already used RippleNet services, the Central Bank of Brazil’s approval makes this the first time a Latin American bank has utilized ODL.
However, Travelex will firstly enable these cross-border payments between Brazil and Mexico, with plans to open up more payment avenues in the region and with more use cases suited to enterprise needs. The news comes as the Brazilian government approved their first “Bitcoin law” in April 2022, which set out to create a regulatory framework as to how cryptocurrencies would be regulated.
The report said that Brazil is also in the process of rolling out a central bank digital currency (CBDC). The decision has been a controversial one, with Economist Fabio Araujo of the opinion that the CBDC “will be able to halt bank runs and impose other restrictions on citizens’ access to money.”
Brad Garlinghouse, the CEO of Ripple, said:
“Brazil is a key market for Ripple given its importance as an anchor to business in Latin America, its openness to crypto and country-wide initiatives that promote fintech innovation. As a result, the market is experiencing an explosion of activity as institutions look to adopt crypto and blockchain technology to solve customer pain points.”
Thus, Garlinghouse added:
“From day one, we’ve focused on building solutions that deliver real utility and we are excited to collaborate with an innovative partner like Travelex Bank to help move money more efficiently for the benefit of its customers across Brazil.”