Foreign workers in Japan significantly contribute to the economy through remittances, sending billions of dollars back home annually. SBI Remit, the international remittance arm of SBI Holdings, has emerged as a leader in this arena, recently announcing that its cumulative cross-border remittance volume has surpassed ¥2.5 trillion, which is over $15 billion at current exchange rates. This milestone is particularly noteworthy in relation to the cryptocurrency XRP, as SBI Remit employs Ripple’s On-Demand Liquidity (ODL) service for its transactions.
SBI Remit has been operational since December 2010 and has become a key player in the remittance market for foreign workers in Japan. With transfer fees starting at around ¥460 (approximately $3) and the ability to credit transfers to recipients within as little as ten minutes, the company facilitates substantial remittance flows, particularly to Southeast Asian nations like the Philippines, Vietnam, and Indonesia.
The recent milestone highlights an extraordinary growth trajectory: while it took SBI Remit 14 years to reach its first ¥2 trillion in transfers, the last ¥500 billion was achieved in just 17 months, marking a tripling of its growth rate. The total amount includes all business operations, indicating the impact of Ripple’s technology, particularly since the company began utilizing ODL in 2021.
SBI Remit utilizes two of Ripple’s core products. The first is RippleNet—a proprietary messaging system that enables real-time communication for transfer notifications among financial institutions. The second is ODL, which makes use of XRP as a bridge currency for real-time transactions. The implementation of ODL has been transformative for SBI Remit, leading to immediate processing of yen to digital wallets in the Philippines, and subsequently expanding to direct bank deposits in other Southeast Asian countries.
Traditional cross-border transfer methods necessitate pre-funding destination accounts to manage incoming transactions, which ties up capital and incurs maintenance costs. ODL circumvents this by facilitating instantaneous transactions that use XRP, thereby reducing liquidity costs by 60 to 70%. This innovative approach has resulted in an accelerated growth of XRP corridors compared to traditional methods.
Japan is vital to Ripple’s operations, with SBI Holdings being its largest external shareholder, holding a 9% stake since 2016. Over half of Ripple’s ODL volume originates from Japanese corridors—no other country plays a similar role. Additionally, Japan’s governmental amendments to financial regulations could potentially reclassify XRP as a financial instrument, with implementation anticipated in fiscal 2027. This regulatory shift might pave the way for Japan’s first XRP exchange-traded fund (ETF), further fortifying SBI’s position in the market.
The $15 billion milestone serves as a strong indicator of XRP’s practical utility in real-world transactions, countering skepticism about its usage beyond speculative trading. However, while the volume of remittances utilizing XRP is growing, it does not necessarily translate to increases in the token’s market price. The rapid execution of ODL transactions means that XRP is quickly bought and sold, rather than held.
Future developments in Japan, including the anticipated regulatory changes and ETF approvals, could unlock new levels of demand for XRP as an investment asset. SBI Remit is well-positioned to capitalize on these developments, and the recent milestone suggests a robust foundation from which it can grow. As the market evolves, the role of XRP in international remittances and its significance within the broader cryptocurrency landscape will likely gain further prominence.
