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Financial services giant Mastercard has given a significant nod to Ripple, a crypto-focused company, in a recent report exploring the future of remittances in Latin America. The report highlights the challenges of traditional remittance services and recognizes Ripple’s blockchain technology as a potential solution.
Ripple Gets Stamp Of Approval From Mastercard
The Mastercard report highlighted the critical role remittances play in Latin America. Citing UN data, it details how these cross-border payments are a lifeline for families and communities, especially in low and middle-income countries. Mexico, for instance, received a staggering $55 billion in remittances in 2022, making it the world’s largest recipient.
Remittance Services Struggle With High Fees And Security Risks
However, the article identifies several pain points plaguing remittance services. High fees, heavy reliance on cash transactions, security concerns, and a lack of user-friendly digital experiences are major hurdles for users. These inefficiencies not only make sending and receiving money cumbersome but also eat into the already strained finances of many.
This is where Ripple steps in. The Mastercard report acknowledges Ripple, alongside Stellar and Circle, as pioneers in leveraging blockchain technology to revolutionize international money transfers. Blockchain’s core attributes, such as transparency and immutability, offer the potential for faster, more secure, and cost-effective remittance services.
#Ripple cited a few times in the new MasterCard report, “The future of remittances in Latin America: Digitalization, multiple rails, & the strategic role of partnerships” as an example of blockchain in remittances & CBDCs. #XRP not directly mentioned.
1/3https://t.co/6Wj2xOh73b
— WrathofKahneman (@WKahneman) March 25, 2024
The report further shines a light on Ripple’s partner, SBI Remit. This Japanese money transfer service provider began using Ripple’s XRP cryptocurrency for cross-border transactions in three Asian countries last year. This development underscores the real-world application of Ripple’s technology in facilitating smoother and potentially cheaper remittances.
Beyond remittances, Mastercard acknowledges Ripple’s work with island nation Palau in exploring central bank digital currencies (CBDCs). CBDCs are digital versions of a country’s fiat currency, potentially offering faster and more secure domestic and international payments.
A $500 Billion Market By 2026
Mastercard predicts the digital remittance market share to reach over $500 billion by 2026, reflecting an annual growth rate of nearly 10%. Interestingly, Ripple has a much bolder prediction, estimating the entire cross-border payment market to reach a staggering $250 trillion by 2027.
Mastercard’s recognition of Ripple is a significant development for the crypto company. It validates Ripple’s technology and its potential to address the long-standing issues plaguing remittance services, particularly in Latin America. While the two entities have different outlooks on market size, both agree on the significant growth potential in the cross-border payments sector.
XRP price up in the last 24 hours. Source: Coingecko
Following the news of Ripple’s recognition by Mastercard for XRP-based remittances, XRP experienced a notable 3% rise in its price. This positive movement in XRP’s value reflects the market’s optimism and confidence in the potential collaboration between Ripple and Mastercard, signaling a favorable response to the integration of XRP into Mastercard’s payment network.
Featured image from Lukas/Pexels, chart from TradingView
