Banks will take a while to adopt distributed ledgers, say Ripple Cryptographer

Ripple’s xCurrent is proving popular with banks, but it’s not a true distributed ledger…

Ripple’s staff have had plenty to say for themselves over the last few days, it would seem. Following its CEO’s comments regarding Chinese control of Bitcoin mining – as part of a wide-ranging appearance at the Stifel Financial 2018 Cross Sector Insight Conference in Boston – it’s chief cryptographer has spoken to Reuters, saying that the use of distributed ledgers by banks is going to be limited for a while by issues of scalability, and the lack of privacy the technology affords.

“I will concede, we haven’t gotten there yet,” Schwartz is quoted as saying.

“What we hear from many of our customers,” he continued, “is that it’s imperative to keep their transactions private, process thousands every second, and accommodate every type of currency and asset imaginable.”

Thus, Ripple (the company) has developed a hybrid approach that has enabled it to be more palatable to big banks like Santander, which has invested in the firm and uses its xCurrent system.

Ripple’s cross-border payments technology, xCurrent, has its back-end systems for a while, and drives its much touted One Pay FX app. That however, uses a system of  “bi-directional messaging” that, while built on Blockchain principles and reliant on cryptography, “is not a distributed ledger,” according to Schwartz. This makes it fundamentally different from systems built around Ethereum or Hyperledger. Nor does it make use of the cryptocurrency Ripple created – also called Ripple (XRP).

XRP does, however, underpin the Ripple (the company) xRapid payments system. That has not been anywhere nearly as widely applied as xCurrent, but is being eyed-up by a number of payments companies, according to the company.