Ripple is one of the most popular digital currency companies in the cryptocurrency market. The firm is trying to increase its presence around the world and attract new financial firms to improve their cross-border payments and transactions.
However, Ripple is not alone. SWIFT is another company that is working trying to improve the services that it currently offers to banks and other financial institutions. SWIFT is the predetermined services provider for cross-border transactions for financial institutions in different countries.
The Society for Worldwide Interbank Financial Telecommunication is working on a new system called Global Payments Innovation (GPI). This is going to make it more difficult for Ripple to overtake SWIFT as the market leader in the industry.
In the cryptocurrency market, Ripple is a very important player. XRP is one of the top three digital assets with Bitcoin (BTC) and Ethereum (ETH) and it has been embraced by different companies and crypto exchanges. The Ripple network uses the XRP digital currency in order to process cross-border payments. With it, companies can source liquidity on-demand and make faster and cheaper payments. This clearly shows that Ripple is a direct competitor to SWIFT.
At the moment, SWIFT sets the standard for more than 10,000 banks around the world that have registered their national IBAN formats. It allows companies to settle payments using their SWIFT messages.
Due to the growing competence experienced by SWIFT, the firm decided to search for more innovative solutions and start improving its services. This is why they are now focused on Global Payments Innovation. The intention is to meet international standards by including a cloud-based payment tracker. They have also been developing a membership directory and a service level agreement (SLA).
According to a report released by SWIFT, there are 100 financial institutions that are using the GPI services. The main difference with Ripple is that the GPI solution is a centralized proposal while Ripple has a decentralized network of validators for transactions that take place on the Ripple Ledger.
Some of the services provided by Ripple are xCurrent and xRapid. Nevertheless, Ripple might not be able to be compliant with regulations all over the world, compared to SWIFT that is more flexible in this area. Ripple is already working with more than 200 different institutions that are connected to their network. In the future, the intention is to keep growing and attract a larger number of firms and companies interested in Ripple’s solutions.
SWIFT is clearly an established player that has a wide network of connected banks in every single continent. Meanwhile, Ripple is just a company that is starting to change some of the rules of the market. Nevertheless, it will take some time before Ripple is able to really compete against SWIFT.
At the time of writing this article, the XRP digital asset is currently being traded in the third position in the market. It has a price of $0.302 and it also has a market cap of $12.47 billion.
In a recent article released by Forbes, Frances Coppola explained that there is no such a thing as ‘Dorman Funds’ in banking, something that Ripple claims. She explained that using XRP would not eliminate the real problems related to risk-averse banks and that international payment using the Continuous Linked Settlement (CLS) system is fast and also convenient for financial institutions.