Ripple Targets the Japanese Markets
July 9, 2018 2:07 pm
The very specific reason for Ripple to have entered the Japanese market is because of a theory as claimed by slinuxuzer on XRP Chat Forums. He has illustrated through his posts on the forums mentioning some basic facts about the Foreign Exchange [Forex] market.
Being one of the largest markets in the world, the Forex market transfers around $5 trillion every day which includes both the interbank as well as over-the-counter markets performing spot trading, forward trading, futures and many others. The part of the market that deals in Japanese Yen [JPY] holds a share of about 21%, which renders to 950,000 billion every day. It is the third biggest currency being traded in the market, after USD and EUR.
SBI Group is one of Japan’s biggest banking associations that covers about 80% of all deposits done in Japan. As the CEO of Ripple, Brad Garlinghouse has stated, Japan’s inter-country payment rails are not up to the mark, Ripple’s partnership with SBI is said to be in the chase of leapfrogging payment rails. However, SBI also manages a Forex division with over 1 million traders. Their latest report suggests an affiliation with MoneyGram and also references their partnership with Ripple, stating:
“Money transfer services between SBI Remit and The Siam Commercial Bank Public Company Limited, the largest private bank in Thailand, makes use of the next generation settlements platform (Ripple Solution) from Ripple of the U.S., to provide international remittance services founded on distributed ledger technology, with plans to employ virtual currencies in settlements.”
XRP gaining 1% of the Japanese Forex market would provide a total of $10 billion volume made in trades every day, which signifies “one small piece, of one corridor, of one use case”. Comparing this against the current supply of the token, which is close to 20 billion, this will cause a “notable price increase”, says slin.
Forex traders are also incentivized to use XRP to reduce compensation times of transactions, which would in turn boost profit margins in an already competitive business. Moreover, with the use of xRapid, capital in the form of nostro and vostro accounts would be freed up for use elsewhere.