The R3CEV banking consortium could be partnering with Ripple Labs, according to a tweet from Ripple Labs CEO Chris Larsen . Chris Larsen “The future of fintech is bringing together like-minded companies, like @R3CEV and @Ripple. More details to come soon…,” Larsen tweeted. The future of fintech is bringing together like-minded companies, like @R3CEV and @Ripple . More details to come soon… — Chris Larsen (@chrislarsensf) May 19, 2016 R3CEV Explores Ripple
Jo Lang, R3 research director, wrote a white paper on considerations for Ripple adoption by large financial institutions one year ago.
Lang noted that Ripple has focused on partnership versus competing with existing financial institutions seeking to gain efficiencies and improve transaction processes. R3 partnered with bitcoin developer Peter Todd to complete a technical review of the Ripple Protocol Consensus.
Ripple Labs is not trying to disrupt banking, Lang wrote, but upgrade traditional settlement and payment solutions. Ripple sets itself apart from current settlement solutions with cost, speed and ubiquity, Lang noted. “We have begun to see the emergence of newer payments solutions and products that have built on top of the Ripple network to leverage their settlement solution.” R3 Has Concerns
On the cautionary side, Lang noted that there is great variability among transaction settlement requirements, and institutions will want to have transaction validators guaranteed to meet unique requirements.
Lang noted weaknesses in Ripple’s network, including its reliance on third party validators. The network’s highly decentralized model does not remove the need for a trusted third party. Instead, it creates a new kind of trusted third party, which is risky since misalignment can occur between Ripple and institutions.
Ripple could also rely on its cryptocurrency, XRP, which has the highest market cap following bitcoin and Ether.
In its current form, Lang said Ripple could emerge as a new trusted third party […]
