Reports have been circulating over the past week that a partnership is in place between SWIFT and Ripple. SWIFT is the messaging protocol used between financial institutions, essentially the transaction messaging protocol for the entire fiat financial system. But Ripple CEO Brad Garlinghouse has publicly quashed these rumors and stated that Ripple is not partnering with SWIFT, but is taking them over.
Brad Garlinghouse – “What we’re doing…on a day-by-day basis…is taking over SWIFT.”
The claim that Ripple is taking over SWIFT is not entirely unsubstantiated, given that over 100 large financial institutions are already listed as Ripple clients. If Ripple can provide a cheaper, faster, and more secure means of financial transaction than SWIFT (it can), then it is hard to see why such customers would stick with SWIFT. Speaking on Bloomberg, Ripple CEO Brad Garlinghouse stated that –
“SWIFT said not that long ago they didn’t see blockchain as a solution to correspondent banking. We’ve got well over 100 of their customers saying they disagree. What we’re doing and executing on a day-by-day basis is taking over SWIFT.”
There is little doubt that SWIFT is utterly outdated. It is slow, costly, private, and centralized. It can also lead to political problems. The SWIFT cooperative recently removed Iran from its messaging protocol due to threats from the US. This is in spite of the fact that the EU is granting relief to companies who assist Iran and are then sanctioned by the US. SWIFT was under no obligation to side with the US, and the decision will have disastrous implications for the citizens of Iran.
Ripple has been making some political and economic connections that are cementing their place as a top cryptocurrency. The technical capabilities of the real-time gross settlement system make it ideal for financial institutions. Ripple has backing from SBI Holdings, Accenture Ventures, Siam Commerical Bank, and SCB Digital Ventures. They have partnered with AMEX, Banco Santander, and BBVA. They also created the Global Payment Steering Group in conjunction with Bank of America/Merrill Lynch, Santander, UniCredit, Standard Chartered, Westpac Banking Corporation, and Royal Bank of Canada. Ripple’s xRapid product is also useful in solving liquidity issues for cross-border transactions, and this will could entice many large banks in 2019.
The cryptocurrency world is somewhat divided about Ripple. On the one hand, the company (which still holds the majority of XRP) has ties with banks, an institution that cryptocurrencies were designed to replace. On the other hand, Ripple is a technically proven coin, the only one suitable for large institutions. And it now intends to replace SWIFT, which can only be heralded as a positive innovation. Ripple could be the perfect bridge as cryptocurrencies gradually replace fiat money, and a move from SWIFT can only be an improvement, even to a centralized cryptocurrency.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.