While many banks remain cautious about crypto and blockchain, the most appealing use case for these systems may be the most basic: lowering costs.
With that in mind, New York-based Roxe has introduced blockchain for cross-border payments settlements. The purpose is to create Decentralized Finance, or DeFi, liquidity pools to provide the best wholesale foreign exchange rates to banks, businesses, payment companies or individuals.
In general, DeFi is about creating an open market with an intent to transform traditional banking services into decentralized architectures to expand the use of digital money.
“Today’s international settlement systems for payments and remittances are too slow, too expensive and too risky,” said Josh Li, chief business officer at Roxe. “There are too many disconnected, intermediary banks and payment platforms that create too many delays, increase costs and make payment tracking unreliable.”
Roxe provides an instant settlement network to help central banks and exchanges, payments companies and consumers transfer traditional and digital currencies with other Roxe network members in seconds, Li noted.
The network also helps banks to “launch, manage, issue and distribute central bank digital currencies,” Li said.
The Roxe Payment Protocol uses an automated market on a smart contract to execute transactions between digital currencies, all designed to provide liquidity for faster, less expensive and more transparent payments. In many ways, it operates the way a merchant point-of-sale terminal might in securing the least expensive interchange rate when choosing a routing option for a transaction.
In this manner, the blockchain is powering a Roxe payment network designed to support U.S. dollars and currencies from the U.K., European Union, Hong Kong, India, Philippines, Mexico, Brazil and others. The Roxe Chain settlement network converts stablecoin tokens (which are bound to the value of a traditional currency such as the U.S. dollar) into these currencies.
At Roxe, “we believe that banks are really starting to embrace blockchain,” Li added, citing last year’s Office of the Comptroller of the Currency decision to allow national banks to hold cryptocurrency assets on behalf of their customers as a pivotal move designed to keep banks engaged in the growing crypto process.
The OCC guidance was also a gateway for banks to research and review ongoing blockchain developments to assess its potential for financial services in the future. It came at the same time in which blockchain and digital asset providers were deploying new use cases and services, fully understanding that B2B, foreign exchange or simply…
Read More: Fintech using blockchain to cut foreign exchange costs | PaymentsSource