Ripple, a payments company using blockchain technology, is set for a huge partnership with DriveWealth, a global brokerage infrastructure provider, which is expected to usher in blockchain-based payments, stablecoin settlements, and digital asset custody to traditional financial markets.
As per the announcement, both companies are set to integrate a number of Ripple's institutional products with the global investment infrastructure of DriveWealth.
DriveWealth is a brokerage-as-a-service provider that powers the investing and trading services for over 100 partners globally, ranging from fintechs, digital wallets, and financial institutions providing access to U.S. stock markets.
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Through this new partnership, Ripple's exposure in the traditional financial space may take a massive leap forward by offering a global footprint of investment platforms access to Ripple's blockchain-based infrastructure.
RLUSD to be central
One of the major aspects of this partnership is the integration of a U.S. dollar-backed stablecoin (RLUSD) for institutional settlements.
DriveWealth will first roll out institutional settlements using RLUSD on the XRP Ledger (XRPL) in Europe before making its way to the U.S. as well.
Ripple's stablecoin minting and burning features will be used for this integration.
The objective here is to enable institutional customers to fund and manage their collateral accounts with stablecoins, which can easily be exchanged for traditional currency in close to real time.
This will help them minimize their dependence on traditional bank transfers, which might take a much longer time to complete, especially if the money is being transferred overseas.
There's a disconnect between U.S. equities settlement, which is cyclical, and cross-border money transfer, which could take a lot more time to complete.
With stablecoins, DriveWealth aims to enable faster capital availability so that clients can fund their trading operations without relying on bank wires.
Apart from payments and stablecoin settlement, this partnership could also offer Ripple's expanding prime brokerage business new avenues.
DriveWealth and Ripple Prime are looking into equity financing opportunities that Ripple Prime's Delta One can offer.