Vietnam’s Orient Commercial Joint Stock Bank is in the news after it joined RippleNet as a strategic partner on 16 October.
Phong Nguyen, Head of Fintech at OCB, described the strategic partnership as the result of a “10-month effort in mobilizing multi-division resources and aggressively exploring business use cases.”
According to Nguyen, Ripple’s technology will cut down the expense and fees involved in remittances and cross-border payments, while also boosting productivity and transparency.
It should be noted, however, that at the time of writing, both OCB and Ripple were yet to announce the same officially via a press release.
OCB is headquartered in Ho Chi Minh City and is one of Vietnam’s largest banks with $4.6 billion AUM and over 130 branches over the country.
Interestingly, it is the second bank to join hands with Ripple, after TPBank did so in 2019 and was able to increase the speed of its remittances to a few minutes, as opposed to a few hours.
RippleNet is Ripple’s On-Demand Liquidity product that uses XRP to bridge two currencies, facilitating cross-border payments in as little as three seconds. Ripple has a global payment network of over 200 financial institutions and facilitates payments in over 40 currencies. In fact, according to recent reports, 20% of RippleNet transactions are performed using XRP.
However, it should be noted that cryptocurrency still remains illegal in Vietnam, and as such, TPBank is likely using Ripple’s xCurrent that facilitates cross-border payments using the Interledger protocol and not xRapid that uses the XRP Ledger. It is fair to assume that the OCB would do the same.
Previous Ripple partnerships with the likes of SBI Remit and Michinoku Bank have led many to speculate on the existence of a corridor between Japan and Vietnam, one that has not officially been announced yet. While Japan grants legal status to the use of crypto within the country, the same cannot be said for Vietnam just yet.
Vietnam’s remittance market has grown by 23.6% year over year and is expected to reach $51 million by 2024. If more banks in the region adopt this technology and regulations become more favorable in the region, there is reason to believe that Vietnam will be an important, strategic region for payments going forward.
Speaking of Ripple, the company disclosed several upgrades to its On-Demand Liquidity platform at the recent Swell conference.
CEO of Ripple Brad Garlinghouse revealed that in the 3 years since RippleNet has been live, over 2 million transactions have been carried out with a nominal value of $7 billion.
The company sees a lot of potential in the Asia Pacific region, with Garlinghouse going on to say,
“We’re seeing the greatest traction across Asia… Now it’s also clear our customers are increasingly interested in emerging markets.”