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- FXCoin and Sumitomo piloted an XRP based forward transaction from Japan to Singapore via the international remittance platform developed with SBI.
- The test aimed to demonstrate transactions between Japanese companies and foreign counterparties.
The XRP based remittance platform for international payments developed by FXCoin Ltd. and SBI Holdings continues to make significant progress, as FXCoin recently reported. As part of a demonstration experiment, the company conducted a forward transaction using XRP with Sumitomo Corporation to send a payment to Singapore on February 25, 2021.
A previous demonstration experiment was conducted on November 27, 2020 and involved a forward transaction with a group company in Japan. The transaction now executed involved Sumitomo sending XRP to Singapore on a trial basis. Subsequently, Sumitomo purchased XRP from FXcoin at a specific date by entering into a forward transaction with FXcoin to hedge the price movement of XRP.
Regarding the significance of the experiment, FXCoin reports that the test was intended to demonstrate FXCoin’s mechanisms for hedging against the high volatility of XRP.
[…] the forward-dated transaction provided by FXcoin will work as a hedge of the price fluctuation risk associated with XRP-denominated receivables and payables of operation companies.
While the first experiment “demonstrated the usefulness and future potential of crypto-asset forward transactions in Japan,” the current test aimed to demonstrate “transactions related to settlement between domestic companies and foreign counterparties.”
In addition, FXCoin expects that “the ability to conduct a forward-dated transactions using crypto-assets in commercial trades with overseas operating companies is expected to reduce settlement costs, improve settlement speed, and diversify settlement methods in the activities of operating companies for expanding globally in the future.”
Japan leads the way in adopting XRP
As CNF reported, the project was first unveiled in July last year, with the relatively young exchange FXCoin leading the way. The exchange began its operations in 2018 and was founded by a former Deutsche Bank employee. It quickly received a license to operate as an exchange from Japan’s Financial Services Agency regulator in late 2019.
Moreover, in April 2020, FXCoin received an investment of a non disclosed amount by SBI Holding. The latter is one of the biggest supporters of Ripple in Asia. Yoshitaka Kitao, CEO of SBI Holdings, is also a board member at Ripple Labs and a key figure for numerous Ripple and XRP based projects in Japan, such as MoneyTap and SBI Asia.