Bank of America, Santander and the Royal Bank of Canada have today announced they’ve joined forces to create a global blockchain payments network using Ripple’s distributed ledger technology.

UniCredit, Standard Charted and the Westpac Banking Corporation have also joined the effort, which seeks to form the foundation of a global network that performs a similar service as SWIFT inter-bank messaging but with near-instant settlement times. Canadian bank CIBC is also participating.

Fundamental to the Global Payments Steering Group’s early mission is the creation and maintenance of a payments transaction rulebook and formalized standards that they intend to then take to international standards-making bodies.

Marcus Treacher, Ripple’s newly hired global head of strategic accounts, told CoinDesk in an interview:

“The messaging today across borders is Swift. The de facto way everyone moves money through countries is Swift. That’s what we think we can do better with Ripple.”

Treacher invoked cross-border payments solutions like the one Santander announced in May, in which bank employees could issue payments between banks using Ripple’s network.

The news closely follows the announcement that the firm had raised $55m earlier this month to expand its existing projects. Ripple has raised more than $90m in venture capital to date.

The backbone

Right now, the banks involved are focused on hammering out the rules of play, according to Treacher.

The first step is a standardized agreement that establishes the terms and conditions which a bank must agree to in order to join, detailing how transactions will be processed and what kinds of information will be exchanged.

The second step involves creating a “functional standards document” that will allow the various banks to interact across currencies and jurisdictions. First on the GPSG’s list of priorities is to develop these foundations, followed by creating administrative services to assist the banks.

Previously, Ripple handed over management of its Interledger protocol to the Internet standards body, W3C, and Treacher says his company would like to do something similar to replace the ISO’s current 20022 payments standards for messaging.

The banks involved say they see the development of network standards as a key goal for advancing the technology.

“As ever, the devil is in the details,” said Julio Faura, head of research and development at Santander, in a statement. “We are joining the GPSG in order to contribute to the definition of the standards and processes which the industry now needs in order to move ahead and build better payments networks.”

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple.

Cargo ship image via Shutterstock

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