Japan’s megabanks are not the only Japanese financial services companies keen on growing their fintech footprint. The SoftBank spinoff SBI Holdings is a digital focused conglomerate with a securities division, a digital bank that is reportedly Japan’s largest by deposits, an asset management arm, an insurance business and a venture capital arm.

Earlier this month, SBI Remit, a global remittances subsidiary under Japan’s SBI Holdings, said that it had expanded its services using Ripple’s XRP to bank accounts in the Philippines, Vietnam and Indonesia. By leveraging XRP as a bridge currency and partnering with its affiliate SBI VC Trade, SBI Remit aims for faster and cheaper money transfers that can boost adoption of XRP in target markets. From an operational standpoint, the service will work as follows: SBI VC Trade will execute real-time transfers of XRP in response to remittance requests from SBI Remit.

SBI Remit and Ripple are eyeing these Southeast Asian markets because of their growing remittance flows. Data compiled by the World Bank show that Vietnam’s inbound remittances grew 5.2% to US$13 billion in 2022, while those to Indonesia rose about 6% to reach $10 billion. For its part, the Philippine was the No. 3 inbound remittances market in the world, behind only India and China with a record US$36.1 billion

SBI has partnered with Ripple since 2017, using the company’s international money transfer system to facilitate cross-border transactions. In 2021, SBI Remit adopted XRP as a bridge within its Ripple Payments system in 2021, the time in Japan that cryptocurrency served as a bridge between two different fiat currencies.

One advantage of XRP when it comes to remittances is the near lack of gas fees. Ripple utilizes a fixed transaction fee of 0.00001 XRP, which is pretty much negligible. Ripple’s fees are intentionally kept low so that banks can conduct large transactions on a daily basis.

Ripple’s willingness to work within the existing financial system rather than try to dramatically disrupt could ultimately turn out to be a wise strategy in the long term, as it inks one partnership after another with prominent incumbent financial firms – which then have a vested interest in seeing Ripple succeed.  

That said, taking on SWIFT is never an easy task, and five years after various media proclaimed that Ripple and SWIFT were slugging out the future of cross-border payments, the Belgium-based interbank messaging network is arguably as dominant as ever. This is especially true with the advent of SWIFT GPI, which has improved the speed, transparency and reliability of cross-border payments on the SWIFT network.