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- Mercury FX and Xago Technologies, two of Ripple’s partners, have been selected by South Africa’s IFWG for a regulatory sandbox.
- The goal of both companies is to test the regulatory challenges for XRP based cross-border payments.
Mercury FX, a long-time partner of Ripple and user of the XRP based On-Demand Liquidity (ODL) payment solution, and Xago Technologies have been accepted into a regulatory sandbox by the South African Intergovernmental Fintech Working Group (IFWG). As announced today, more than 50 companies applied to be part of this first regulatory sandbox.
This is designed to provide market innovators with the opportunity to test new products and services that push the boundaries of existing regulation – all under the responsible oversight of the relevant regulators. The initiative is led by the IFWG, and also takes place with the participation of the Financial Intelligence Centre, the Financial Sector Conduct Authority, the National Treasury, the National Credit Regulator, the South African Reserve Bank and the South African Revenue Service.
Mercury, in partnership with Ripple and cryptocurrency exchange VALR, was selected as one of the final six. The IFWG’s goal is to promote fintech innovation in the South African financial market. As Ripple states, it is currently faster to move money by air in the region than it is to send it by foreign wire.
Mercury FX aims to shorten the time window for money transfers to just a few minutes by using On-Demand Liquidity (ODL) and the XRP token. Regarding Ripple’s choice of Mercury FX, Ripple stated:
The company’s IFWG announcement today made clear its belief in the future of blockchain-based money transfer, and its goals for dramatically cutting the time and cost of sending money into and out of South Africa using RippleNet and ODL.
Ripple is honored to be part of this transformation of remittances and international payments within Africa in partnership with innovative partners like Mercury. We are committed to supporting similarly important efforts around the world and working closely with regulators to ensure their success.
As part of the project, Mercury aims to identify and examine the regulatory treatment and associated regulatory reporting implications and obligations of crypto assets, specifically XRP, used to conduct low-value cross-border remittances between South Africa and the UK and vice versa.
Other companies selected before the IFWG include The People’s Fund, The Standard Bank of South Africa Limited, Investec Bank Limited, Xago Technologies, and Centbee. Xago is also a Ripple partner and is also looking to test the regulatory treatment of cryptocurrencies for conducting cross-border transactions between South Africa and the United Kingdom and vice versa.