Ripple Labs hopes to facilitate real-time crypto-enabled payments in 35 African countries.
Ripple Labs, the creators of the XRP token, entered into a partnership with MFS Africa to facilitate real-time crypto-enabled payments in 35 countries using Ripple’s On-Demand Liquidity (ODL) offering, which it released in 2018. Ripple claims it reduces cross-border fees and speeds settlement time by eliminating the need for pre-funded capital, while freeing up working capital. The $2.7 trillion mobile payments sector is booming in Africa, notes Ripple, citing UN data.
The adoption rate for mobile-money is expected to reach 70% of the global population, with significant growth expected in Asia-Pacific and Africa. Financial inclusion is a critical issue in many frontier markets, challenging conventional banks’ abilities to service this rapidly growing sector. Africa’s population is estimated to reach 1.7 billion by 2030, a key driver of Ripple’s decision. In 2021, Africa’s mobile-money transactions reached $701.4 billion, a 39% increase on the prior year, Ripple added in a prepared statement.
“Crypto can, and is, eliminating the traditional problems associated with cross-border payments such as lengthy transfer times, unreliability and excessive cost, while complementing our formerly purely fiat financial infrastructure at low cost,” says Brooks Entwistle, Ripple’s senior vice president for Global Customer Success.
MFS’ payment hub connects more than 400 million mobile wallets and operates across more than 800 payment corridors. Its products include remittance, money transfer, micro-lending, insurance and payment solution services for consumers and businesses.
Meanwhile, a case brought by the US Securities and Exchanges Commission (SEC) against Ripple could be near its end, possibly concluding by mid-2023. In 2020, the SEC accused Ripple of mis-leading investors by selling $1.3 billion in unregistered securities. Ripple denies the complaint, while accusing the Wall Street regulator of “regulation by enforcement.”
Still, the case has garnered support from the broader crypto industry, as Stuart Alderoty, Ripple’s general counsel, acknowledged in a November 4 tweet: “A dozen independent voices—companies, developers, exchanges, public interest and trade associations, retail holders—all filing in SEC v. Ripple to explain how dangerously wrong the SEC is. What is the SEC’s response? We need more time not to listen or engage but to blindly bulldoze on.”
Analysts say the court’s pending ruling will be a defining moment for the crypto market.