Three companies that provide cross-border payment services plan to use technology developed by startup Ripple that employs cryptocurrency XRP to speed transactions.
Ripple, a large holder and promoter of XRP, said its platform for cross border payments, called xRapid, is now commercially available and that it had signed up firms Cuallix, MercuryFX and Catalyst Corporate Federal Credit Union as clients.
XRapid uses XRP, a virtual currency powered by distributed database technology called blockchain, to make international payments faster, according to Ripple.
Mercury FX and Cuallix are money transfer companies, while Catalyst is a wholesale cooperative financial institution that provides a range of services to 1,400 credit unions throughout the United States.
The projects, assuming they go live, will mark one of the first uses of a virtual currency by financial institutions in a commercial product.
Ripple Chief Executive Brad Garlinghouse, in an interview, declined to disclose the volume of payments Ripple expects to be processed by the three financial firms using xRapid.
The announcement comes as financial firms continue to experiment with blockchain, the technology that emerged to track and power cryptocurrency transactions. Large companies hope that blockchain can help them simplify some of their processes ranging from international payments to securities settlement. Despite the excitement surrounding blockchain, few large scale projects have gone live.
At the same time proponents of cryptocurrencies are striving to prove that the virtual tokens have a use aside from speculation.
"In pilot tests we saw the benefits of xRapid, and we're excited to roll commercial payments out within the quarter," Alastair Constance, MercuryFX CEO and founder, said in a statement.
(Reporting by Anna Irrera; Editing by Steve Orlofsky)