Ripple announced on August 18 that the foreign exchange company Travelex would use RippleNet’s ODL to facilitate cross-border payments between enterprises using Ripple’s XRP token. It also stated that Travelex Bank is the first bank authorized by Brazil’s central bank to conduct solely foreign exchange transactions.
While other Latin American companies such as Banco Rendimento, Remessa Online, Frente Corretora, and Banco Topazio have already used RippleNet services, Ripple claims that this is the first time a Latin American bank has used ODL.
Travelex will first enable cross-border payments between Brazil and Mexico, with plans to expand to more regional payment channels and more use cases tailored to enterprise needs.
Brazil’s Bitcoin Law
The announcement comes as the Brazilian government approved their first “Bitcoin law” in April 2022, which aimed to create a regulatory framework for cryptocurrencies.
Brazil is also introducing a digital currency issued by the central bank (CBDC). The decision, however, has sparked debate, with economist Fabio Araujo claiming that the CBDC “will be able to halt bank runs and impose other restrictions on citizens’ access to money.”
Brazil’s adoption of a crypto-friendly regulatory framework, as well as rising institutional interest in digital asset solutions, according to Ripple CEO Brad Garlinghouse, make the country a great fit for the ODL:
“Brazil is a key market for Ripple given its importance as an anchor to business in Latin America, its openness to crypto and country-wide initiatives that promote fintech innovation. As a result, the market is experiencing an explosion of activity as institutions look to adopt crypto and blockchain technology to solve customer pain points.”
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Garlinghouse added that Travelex’s use of the ODL service will make cross-border payments much more efficient, with over $780 billion in payments flowing into Brazil annually:
“From day one, we’ve focused on building solutions that deliver real utility and we are excited to collaborate with an innovative partner like Travelex Bank to help move money more efficiently for the benefit of its customers across Brazil.”