On November 30, FXCoin Co. Ltd. announced the launch of a proof of concept between the companies of the Sumitomo Corporation Group. This payment method will be using the XRP to settle debts and credits between the companies. According to the company, this is the first time a major corporation in Japan has performed a pre-dated transaction using a virtual currency.
Aside from the Sumitomo Corporation, Sumitomo Global Metals and Ripple’s well-known and longstanding partner, SBI Group, will also participate in this project. The proof of concept is meant to test a system that aims to avoid the risk of the fluctuating exchange rates of current virtual currencies.
To do this, Sumitomo Corporation will be using XRP to settle their debts and credits between the different participating Group companies. FXCoin will be executing the transactions of Sumitomo Corporation to hedge the price fluctuations of XRP and sell these corresponding cryptocurrency on a particular date.
FXCoin will also be developing a new mechanism, one that is similar to that used by the foreign exchange market. The system will allow participating companies and institutions to set the price of these virtual currencies when they send them through the swap market.
Once the price of future cryptocurrency is set, it should be much easier for companies and institutional investors to use virtual currencies that will be benefiting from small transfers, FXCoin Co. Ltd. announcement said.
Also, in an earlier statement, FXCoin chief strategist Yasuo Matsuda said about their long term goal for this project.
“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.”
This project was first announced in July of this year. FXCoin is a relatively young exchange and has only started in 2018 and was founded by Deutsche Bank’s former employees. It received a license to operate around the latter months of 2019 as an exchange from the Japanese regulatory authority, the Financial Services Agency.
Also, FXCoin received an undisclosed amount of investment from SBI Holding in early April of this year. SBI Holdings is currently the largest supporter of Ripple in Asia. CEO of SBI Holdings, Yoshitaka Kitao, is also a board member of Ripple Labs and is a key figure in several Ripple and XRP-based projects in Japan.
