Bank of America, Santander, and the Royal Bank of Canada partner to create a global blockchain payments network using Ripple's distributed ledger technology
Bank of America, Santander and the Royal Bank of Canada have today announced they've joined forces to create a global blockchain …
Context & Ripple Effects
This tri-bank deal is the moment the bank blockchain effort moves from shared research to a named vendor. Nine months after Goldman Sachs, Barclays and others joined the R3 consortium to build a blockchain framework for markets, Bank of America, Santander and RBC are skipping the committee stage and building a global payments network directly on Ripple's distributed ledger.
The choice of Ripple over an industry-owned framework matters: it makes one startup's technology the substrate for interbank settlement, and it sets up the follow-on moves in the coverage — JPMorgan launching its own processing network with ANZ and RBC, Santander extending Ripple to US-UK transfers with American Express, and eventually Santander shipping live cross-border payments in four countries.
First-order effects
- Bank of America, Santander and RBC get a common settlement rail for cross-border payments, with Ripple as the technology supplier rather than a neutral industry utility.
- Ripple converts three tier-one bank logos into reference customers, giving it a concrete answer to the R3 consortium's industry-framework pitch.
Second-order effects
- JPMorgan answers by building its own blockchain payment network with ANZ and RBC — note RBC sits on both sides — pushing banks toward competing rails instead of one shared standard.
- Santander doubles down on the same vendor, pulling American Express into a Ripple-based US-UK corridor, which pressures other correspondent-banking pairs to pick a ledger.
Third-order effects
- If the pattern holds, cross-border payments consolidate into a handful of competing bank alliances organized around specific ledgers — foreshadowing the 75-plus-bank JPMorgan/RBC/ANZ bloc — with membership in the right consortium, not correspondent relationships, determining settlement reach.
- Vendor-led infrastructure shifts bargaining power in interbank payments from the banks collectively to whichever technology provider wins the reference-customer race, a dependency regulators would eventually have to weigh.
The trend: Cross-border banking is reorganizing from correspondent networks into competing blockchain consortia built on commercial ledgers like Ripple's, with each alliance racing to sign the next tier of banks.