Santander has launched a foreign exchange service that uses blockchain technology to make same-day international money transfers.
The service, called Santander One Pay FX, uses tech developed by blockchain firm Ripple. Santander said it is the first cross-border payments service using blockchain to be made by a bank.
Blockchain, or distributed ledger technology, is a decentralized network that records a growing list of transactions. It was originally used as the technology to underpin bitcoin but banks have become increasingly interested in other use cases, like clearing and settling payments.
Santander’s blockchain-powered foreign exchange platform is currently live in four different countries — Spain, the U.K., Brazil and Poland. A wider roll-out is expected in coming months, the bank said.
Innoventures, a $200 million fintech, or financial technology, venture capital fund set up by Santander, was one of a number of investors to participate in Ripple’s first round of funding in 2015.
Ripple has struck partnerships with multiple banks and other financial institutions, including Santander. Banks are less keen to use the firm’s digital currency XRP, but earlier this year two money transfer firms, MoneyGram and Western Union, announced projects involving the cryptocurrency.
On Wednesday, Ripple invested $25 million into a fund started by Blockchain Capital, a venture capital firm dedicated to blockchain.