Is A Ripple, XRP And SWIFT Partnership In The Mix?

During the last weeks, there has been speculation about Ripple partnering with SWIFT in order to improve cross-border payments. This brought a lot of hype to the XRP community that was really excited about this possibility. If Ripple partners with SWIFT, XRP would clearly benefit from it since it will be the currency used to transact between institutions around the world.

Ripple will be also part of the Sibos conference that is going to take place in Sydney in the coming weeks. This partnership could be one of the most important things that could ever happen to Ripple since it will have access to more than 11,000 clients that SWIFT is working with.

At the same time, Santander, part of RippleNet, has also partnered with SWIFT for the new Global Payments Initiative program. This led several enthusiasts to believe that the bank could be using third-party liquidity in order to settle cross-border transactions.

Ripple has also different solutions in order to provide liquidity to banks and other institutions with its different services and products.

On the matter, Ripple explains:

“RIppleNet efficiently solves these liquidity pain points for financial providers and banks using flexible solutions that address various types of liquidity provisioning… RippleNet’s pathfinding capabilities, financial institutions can even link together multiple liquidity arraignments within the same transaction to optimize their transaction networks.”

At the moment, instant settlement between banks using the SWIFT network is almost impossible, affecting the time to actually settle payments because of liquidity issues.

Currently, RippleNet is able to source liquidity in three different ways. The first one is bank to bank transactions such as it takes place in SWIFT. The second is to establish third-party fiat relationships between banks and other financial institutions. Finally, the third option is to use XRP as a bridge between currencies.

At the moment, transacting funds using XRP is the best solution for several companies. Institutions have to pay between 40% and 70% less in fees and settlement is done in two minutes. Furthermore, it is possible to expand the reach of the RippleNet into different payment corridors.

Dilip Rao, Global Head of Infrastructure Innovation at Ripple mentioned that forecasting the funding in real-time is a very big challenge that would result in ‘unhappy clients’ or money left over.

However, he said that a potential partnership between Ripple and SWIFT is ‘Idle speculation.’ Additionally, he said back in April that the company recognizes that its model can eventually lead to SWIFT’s demise. However, they would be happy to coexist with SWIFT.

Furthermore, Brad Garlinghouse said:

“Swift GPI is like putting a Ferrari shell on a Model-T engine. It’s a cosmetic upgrade on old infrastructure: messaging is still not tied to settlement, it’s unidirectional and can’t solve for liquidity.”

RippleNet was created so as to solve different problems experienced by SWIFT and it aims to do so while coexisting with the system. However, in the future, Ripple and SWIFT could work together and provide better services to financial institutions all over the world.

Article Source: https://bitcoinexchangeguide.com/where-theres-smoke-theres-fire-is-a-ripple-xrp-and-swift-collaboration-in-the-mix/





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