SWIFT seems to be feeling the effect of Ripple’s entry into the cross-border payments market.  That’s because SWIFT has recently updated its systems in a bid to become more effective in an upgrade dubbed global payments innovation. Through this upgrade, SWIFT payments will now be reaching their destination within 30 minutes. However, SWIFT is taking the battle a notch higher by claiming that blockchain technology has an inherent scalability issue, which makes it impossible to implement at scale without exposing sensitive information.  SWIFT also argues that the speed issue which is a key ripple (XRP) selling point is really a non-issue, since they already have it through their cloud platform.

However, ripple (XRP) recently hit back, with Brad Garlinghouse tweeting that the upgrade is like putting a Ferrari shell on a model-T engine. In other words, it’s putting touch ups on an old system, and therefore, cannot effectively handle the issue of liquidity. These back and forth clap backs between these two platforms only point to one thing, and that’s the fact that the battle for the cross-border payments is hitting up. So who is going to win this battle?

From the look of things, ripple (XRP) is set to win this battle. That’s because it is solving a problem that SWIFT is unable to solve, and that’s liquidity. If SWIFT were in a position to solve the problem of liquidity, there would be no need for banks to hold up trillions of dollars in Nostro Vostro accounts. Ripple (XRP) solves this problem because a bank does not need to tie up any money. That’s because a bank doesn’t even need to hold XRP for long, but just for a few seconds.  This means that the issue of crypto volatility that SWIFT alludes to as a challenge for XRP is irrelevant. The volatility of XRP has no bearing whatsoever on the value of XRP.

Another factor that SWIFT alludes to is that of information exposure through the blockchain. However, according to ripple, they have this solved, through an end-to-end system of communication between banks. This means that while information is sent on the blockchain, only the transacting banks are privy to the transaction.  On the issue of scalability, ripple is more of a hybrid blockchain, and is scalable according to the needs of the user.

With all these factors at play, it is clear that ripple (XRP) looks set to win the battle for the control of cross-border payments. It is clearly way better than SWIFT in solving banks cross-border payments problems, especially as a cost cutting mechanism.

When, since at this point it’s a matter of when, ripple (XRP) replaces SWIFT, the value of XRP will shoot to the moon. That’s because SWIFT handles close to $5 trillion worth of transactions every day. If ripple were to handle transactions at this magnitude, then the 100 billion XRP that exist today would not be enough. This would lead to an increase in the value of the existing Ripple (XRP) to highs of over $50 a coin.  Things look pretty good for XRP in the future.


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