Last year in January 16 proposals were submitted to the Faster Payments Task Force from several payment providers. Ripple, taking advantage of the opportunity, immediately offered its instant, low cost and secure payment solution.
The Federal Reserve of the United States of America led the task force.
In an effort to improve the payment system in the United States, the task force worked from 2015 to 2017 and engaged with a number of technology stakeholders.
The innovation in payment technologies might have induced the Federal Reserve of the United States to adopt an up-to-date payment system that can process internal and global money transfers.
The task force comprises of well-trained and experienced members including, Consumer Trust Organizations, Government End Users, Business End Users, Small Financial Institutes, Medium Financial Institutes, Large Financial Institutes, Non-bank Providers and some other Industry organizations.
Some of the goals that the task force wants to achieve in order to improve the payment system are: to speed up the payment system in a cost-effective manner, safely transfer funds in an out of the U.S through a system that is efficient for both customers and businesses and most importantly adopt a payment method that is embraced by a wide array of participants.
Now in order to achieve its goals, the task force listed out the following strategies:
- Engage technology stakeholders to work on possibilities that could aid in improving the U.S payment system.
- Identify an operative approach to implement a safer, faster and common payment network in the U.S.
- Work to avoid breach risks from the payment system and ensure safety, security and resiliency.
- Achieve an efficient end-to-end method to power cross-border payments
- Improve Federal Reserve services like Bank payment, settlement and risk management.
Why would the Federal Reserve accept Ripple’s proposal?
Ripple’s payment network possesses a wide range of qualities that help it outstand among other payment providers.
First of all the transactions made via Ripple are secured on a blockchain that acts as a distributed ledger. This quality of Ripple is widely appreciated by financial institutes and even the U.S government. Using Ripple the Federal Reserve can successfully achieve its goal of establishing a secure and transparent payment system that is free of frauds and hacks.
Secondly, the transactions made via Ripple (XRP) cost way less as compared to traditional payment providers. A number of global banks and financial firms have partnered with Ripple and are providing their customers with a much cheaper payment solution. Now this fits into the Federal Reserve’s goal of a cheap money transfer service that is also embraced by a number of stakeholders.
Thirdly, transactions via Ripple Network are settled within 3.3 seconds, faster than Bitcoin that takes an hour, Ethereum that takes 2 minutes hence, faster than every other payment option. Now such transaction speed can help the U.S government easily distribute funds among states, send financial aids to disaster-struck areas or even pay its officials living in military bases outside the United States.
Ripple, in all its aspects, is the perfect solution for the Federal Reserve. And if the Federal Reserve ends up accepting Ripple, it will surely be a whole new beginning for Ripple as well as other cryptocurrencies.