DriveWealth announced on October 14 that it will integrate Ripple’s RLUSD stablecoin infrastructure to facilitate money transfers in Europe, utilizing the XRP Ledger. This integration marks the company’s intention to enhance its brokerage services. After establishing a presence in Europe, DriveWealth plans to expand the initiative to the United States.
DriveWealth primarily serves as the backend brokerage for over 100 fintechs, digital wallets, and financial institutions that provide access to U.S. markets, rather than offering accounts to the public directly. The use of stablecoins is expected to expedite settlement processes, replacing traditional bank wire transfers that can be time-consuming.
Improving Settlement Efficiency
The announcement highlights the discrepancy between the rapid settlement of U.S. equities, which occurs on a T+1 basis, and the slower process of cross-border dollar transfers. Ripple asserts that this delay can restrict capital and increase funding needs. By adopting stablecoins, DriveWealth clients will be able to fund and manage collateral accounts with assets that convert to cash almost instantaneously.
Naureen Hassan, the CEO of DriveWealth, explained, “We’ve already enabled 24/5 trading; now we need the funding to match, so clients can move with the markets instead of waiting for them.”
Jack McDonald, Senior Vice President of Stablecoins at Ripple, stated that DriveWealth initially approached them with a specific challenge related to cross-border settlements. He noted that this led to a broader collaboration between the two companies.
Multifaceted Approach to Integration
The announcement outlines four key workstreams, each at various stages of implementation:
- Implementing stablecoin settlement in Europe using RLUSD on the XRP Ledger, with plans for U.S. expansion later.
- Supporting cross-border payments through Ripple Payments for DriveWealth’s global partners.
- Establishing digital asset custody in Europe, with future plans for broader market coverage.
- Creating real-time treasury and custody infrastructure via Ripple’s systems, allowing clients to view and switch between their funds in dollars, stablecoins, and cryptocurrencies.
In addition, DriveWealth and Ripple Prime are considering equity financing through Ripple Prime’s Delta One business, which focuses on U.S. equities and derivatives.
No specific timeline was provided for when RLUSD settlement will go live in Europe, nor was there information on the volume it could handle. The announcement mentioned that DriveWealth is “integrating” the infrastructure, signifying an ongoing process rather than immediate availability.
Expanding Institutional Support for RLUSD
Ripple continues to establish institutional agreements for RLUSD. Standard Chartered announced on October 13 that it has initiated institutional custody for RLUSD on the XRP Ledger through its Dubai International Financial Centre branch, regulated by the Dubai Financial Services Authority. The bank, along with Ripple and LMAX Group, is also working to allow RLUSD to be used as collateral for certain LMAX products, although this is subject to further documentation and regulatory approvals.
Ripple claims to have gained over 85 licenses, dedicating more than a decade to developing blockchain solutions for financial institutions. DriveWealth operates as a registered broker-dealer and is a member of both FINRA and SIPC. Its European affiliate is licensed under MiFID II to trade securities and provide custody throughout the European Economic Area.
The next significant event will be a fireside chat at Ripple Swell in New York City on October 28, where officials from both companies are expected to discuss the partnership.
