Ripple and Central Bank of China in talks but do not get your hopes up

ripple central bank of china

Ripple team was there in China to have a meeting with Central bank of China to make cross border payments more seamless. Ripple’s official twitter account sent out a tweet regarding this and this caused the price to jump from $0.19 to $0.24. However, it shall be noted that China has strict stance on banking and fintech sector since the Chinese government consider these sector to be on national security’s priority list. So if a company does not have more than 51 percent Chinese shareholder, they would not be allowed to operate in China.

So, it is unlikely that they will allow Ripple, a foreign company to operate in China. There are some workarounds though – for instance, by setting up Variable Interest Entity (VIE structure) but getting it done in banking sector is next to impossible. So while this is positive news for Ripple and its holder, do not infer this news as “Ripple and Central Bank of China sign a deal”.

From qq.com (Google translate from Mandarin –> English)

Ripple is a financial technology company that provides technology support for commercial banks to provide cross-border payment technology services. The company’s chief technology officer and supervisory director of the company introduced the company’s understanding of the payment and the technical framework of the trading system, the development of the status quo were introduced in the cross-border remittance costs, industry competition, and traditional financial institutions cooperation model And other issues expressed on the question with their own point of view.

   

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