- FXCoin and Sumitomo Corporation have launched a proof of concept for the settlement of debts and credits using Ripple’s XRP.
- The platform is intended to serve as a global cash management system in the long term.
On November 30, FXcoin Co. Ltd. announced the launch of a proof of concept between the companies of the Sumitomo Corporation Group, which will use XRP to settle debts and credibts. According to the company, this is the first time in Japan that a major corporation has conducted a pre-dated transaction with a virtual currency.
In addition to Sumitomo Corporation, Sumitomo Global Metals and Ripple‘s longstanding partner, SBI Group, will participate in the project. The proof of concept is to test a system that avoid the risk of exchange rate fluctuations of virtual currencies.
For this purpose, Sumitomo Corporation uses XRP to settle debts and credits between different the Group companies. FXCoin will execute the transactions of Sumitomo Corporation to hedge the price fluctuations of XRP and sell the corresponding XRP on a certain date.
FXcoin will also develop a new mechanism, similar to that used in the foreign exchange market, which allows companies and other institutions to set the price of virtual currencies when they send them via the swap market.
Once the price of future money transfers is fixed, it should become easier for companies and institutional investors to use virtual currencies that benefit from small transfers, the announcement said. In an earlier statement, FXCoin chief strategist Yasuo Matsuda said about the long run goal of the project.
In an earlier statement, FXCoin’s chief strategist, Yasuo Matsuda, said of the project’s long-term goal:
Until now, active crypto has been used mainly for speculative purposes due to the magnitude of price movements… To establish the exchange market and expand the use for real demand, we will proceed with the demonstration experiment of domestic remittances and remittances abroad through the XRP, and finally, global cash management, corporate finance and trade.
As CNF reported, the project was first announced in July of this year. FXCoin is a relatively young exchange that started operations in 2018 and was founded by former Deutsche Bank employees. At the end of 2019, it received a license to operate as an exchange from the Japanese regulatory authority, the Financial Services Agency.
In addition, FXCoin received an unknown amount of investment from SBI Holding in April this year. SBI Holdings is the largest supporter of Ripple in Asia. Yoshitaka Kitao, CEO of SBI Holdings, is also a board member of Ripple Labs and is a key figure in numerous Ripple and XRP-based projects in Japan.