Euro Exim Bank Exploring xRapid Based Bonds and Derivatives

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As more and more companies partner up with Ripple and deploy its various platforms, we’re seeing more companies think outside the box with what’s possible. Euro Exim Bank became the first bank to use Ripple’s xRapid solution, and it’s now looking at using the other range of products available to deploy bonds and other financial derivatives using the Ripple suite of products. Blockchain bonds aren’t a new concept, as a couple already exist, but if Euro Exim Bank does go ahead and develop its own bonds we could see a new wave of Ripple adoption.

Putting Instructions Inside a Ripple Message

Currently, Euro Exim Bank uses xRapid, the Ripple platform that utilizes XRP for cross-border transactions. What Euro Exim Bank is proposing to do is attach messages to do with the bond – or other financial derivatives – in the XRP transaction. This means, the payment not only carries the payment, but it also carries the contract details. This could help speed up a number of processes in the bond market, as well as making it safer and more secure. In an interview, Graham Bright – Euro Exim Bank head of compliance and operations – said:

Now if we could do that, that means the whole of the ecosystem of trade would not be based on 90 days and hoping somebody pays at the end of the time, but have a defined, absolute exact way of working, tracking, transparency, immutability of the data which is held for every transaction.

Blockchain Based Bonds on the Market

Ripple based bonds are a totally new idea, but blockchain based bonds have actually been around for a while now. Back in August 2018, Australia’s Commonwealth Bank (CBA) was mandated by the World Bank to solely use blockchain technology in its Kangaroo Bond. That means it has to be created, allocated, transferred, and managed exclusively using blockchain technology. The groundbreaking bond went on to sell out in record time and is performing very well. In fact, fund managers at CBA have praised blockchain technology for making the management process far easier than using traditional methods.

Euro Exim Bank is obsessed with being at the forefront of blockchain technology, so it comes as no surprise that we’re going to see it develop bonds through the Ripple suite of products. If it manages to pull it off, we could see other big banks follow suit and use the same systems to create and manage their own bonds on the Ripple network.