For decades, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) has dominated international money transfers, connecting over 11,000 banks across 200m countries.
However, with the introduction of Ripple and its native token, XRP, the financial environment saw a revolutionary change, with XRP tending to overpower the traditional payment system. The slow and costly processes involved in SWIFT transactions left users prioritizing XRP’s blockchain technology.
As the financial landscape is evolving, XRP is positioning itself as a game-changer in cross-border payments. With its fast settlement times, low fees, and transparent ledger, XRP is poised to challenge SWIFT’s dominance and potentially surge to new heights.
Now, the battle between SWIFT and XRP is heating up. Despite XRP’s broader acceptance, SWIFT still remains dominant in the global payments world. However, this supremacy cannot hinder XRP’s growth in the financial market.
SWIFT vs XRP
Interestingly, SWIFT was created to challenge the slow, error-prone Telex system, with a vision “to transform the way value travels across borders.” Currently, SWIFT processes over 53 million messages daily across 220 countries. Despite the heated rivalry between the traditional and blockchain payment systems, SWIFT stands high-headed as major banks have already invested in SWIFT.
Even though the network is often marred by inefficiencies, including delays, high costs, and a lack of transparency, switching systems would be costly, risky, and time-consuming.
However, acknowledging this barrier, Ripple noted that the blockchain aims to modernize the existing systems, rather than replacing them entirely. Ripple aims to make cross-border settlements faster and more efficient, a vision which could be made easier with Ripple’s stablecoin RLUSD.
SWIFT Raises Concerns
In a recent statement, SWIFT’s Chief Innovation Officer, Tom Zschach, raised concerns over the centralization of Ripple and the XRP ecosystem. He spoke against the acceptance of XRP, citing that financial institutions are unlikely to adopt a system owned by a competitor. Zschach added,
“Banks will ask whether they’re comfortable outsourcing settlement finality to a token that isn’t a deposit and isn’t regulated money.”
In addition, he highlighted the significance of neutral and shared governance in financial systems. According to him, a system’s resilience is not solely determined by its ability to survive a legal case. His statement sparks questions about the potential implications for XRP’s adoption in institutional banking systems.
Why is XRP Poised to Overpower SWIFT?
Despite these challenges, the overwhelming acceptance and adoption of XRP make it an apt rival for SWIFT. Ripple’s recent developments and acquisitions highlight its capability to become a dominant player in the global financial landscape.
Ripple to Acquire Rail
Ripple is set to acquire Rail, a Toronto-based stablecoin payments platform, for $200 million, expanding its presence in the stablecoin market, in addition to the RLUSD launch. This strategic move intends to enhance Ripple’s global payments infrastructure, leveraging Rail’s technology to facilitate faster and cheaper cross-border payments.
US National Bank Charter
Ripple is seeking a US National Bank charter to operate as a federally regulated true bank, which could enable the company to provide specialized banking services, including custody services, under federal oversight. With this move, Ripple would gain direct access to the Fed’s payment infrastructure, allowing it to hold reserves for its RLUSD stablecoin and potentially reducing reliance on intermediaries.
Ripple’s Key Features
The performance difference between Ripple and SWIFT is stark. While traditional SWIFT transfers can take several days and cost $20-$50 or more, XRP Ledger settlements occur in 3-5 seconds at a fraction of a cent.
In addition, Ripple’s transparency is unparalleled compared to SWIFT. Every transaction is recorded on a public ledger, allowing for real-time tracking and visibility.
Moreover, the XRP network operates 24/7/365, providing an always-on solution for global commerce and remittances. In contrast, SWIFT is tied to traditional banking hours, weekends, and holidays, limiting its availability.
XRP Eyes Bullish Ascendance
These developments and XRP’s potential to outperform SWIFT make the token poised for a bullish ascendance. Despite its current consolidation, the token is set to go higher, with a price target of $400 and higher in sight.
Despite XRP’s current limited dominance in the global financial system, overshadowed by SWIFT, its future prospects remain bright. While XRP may not be currently the dominant player, its potential for growth is undeniable. Thus, its current position will not be a hindrance for the XRP price growth.
