Ripple's CEO Claims XRP Can Replace SWIFT With 0.1% Error Rate

Ripple’s CEO, Brad Garlinghouse, has asserted that the SWIFT payment system, which has been the global standard for international transactions for over fifty years, is now outdated and in need of replacement. Garlinghouse believes that XRP, Ripple’s native cryptocurrency, has the potential to revolutionize the financial industry by offering a more efficient, transparent, and cost-effective alternative. According to Garlinghouse, XRP is poised to take over SWIFT’s role in cross-border payments, paving the way for a new era of global financial transactions.

The SWIFT network has been instrumental in enabling cross-border payments since its inception in 1973, connecting thousands of banks and institutions worldwide. However, it has not kept pace with the demands of today’s rapidly evolving digital economy. One of the primary issues with SWIFT is its error rate, which stands at around 6%, often due to incorrect or mismatched account details. These errors can result in delays, reversals, and additional costs for financial institutions and their clients.

Garlinghouse highlights that despite its age and the numerous technological advancements in the financial sector, SWIFT continues to operate on outdated architecture that struggles to support modern financial transactions. He argues that SWIFT’s inefficiencies, particularly in cross-border payments, create friction and extra costs that Ripple aims to eliminate with its innovative solutions.

Ripple’s approach to cross-border payments involves integrating both liquidity and messaging into a single, cohesive system. Unlike SWIFT, which functions solely as a messaging protocol, Ripple’s XRP Ledger (XRPL) enables real-time settlement of transactions, reducing processing times from several days to mere seconds. This is achieved by using XRP as a bridge currency, facilitating immediate transfers between parties in different countries without the need for pre-funded accounts.

Garlinghouse emphasizes that Ripple’s technology offers substantial improvements over SWIFT, including reduced fees and the ability to provide real-time feedback during transactions. This functionality helps minimize errors and enhance the reliability of cross-border payments. Ripple’s system also boasts a significantly lower error rate, with estimates suggesting that it could be as low as 0.1%—a stark contrast to SWIFT’s 6%.

Ripple’s XRP is not just a messaging system; it also provides a unique liquidity solution. Traditionally, financial institutions have relied on large banks to supply liquidity for international transactions, often using pre-funded accounts in various markets to facilitate payments. However, this method ties up capital and limits flexibility. XRP offers a solution by acting as a bridge currency in Ripple’s payment system. With XRP, institutions can transfer funds instantly between markets without needing to pre-fund accounts, thereby unlocking capital and enhancing liquidity. Garlinghouse explains that this mechanism provides significant advantages over SWIFT, enabling financial institutions to improve efficiency and reduce costs.

Ripple’s influence is steadily growing, with over 100 financial institutions worldwide, including many connected to SWIFT, already adopting Ripple’s solutions. Garlinghouse is confident that Ripple’s technology is set to surpass SWIFT, claiming, “What we’re doing and executing on a day-by-day basis is taking over SWIFT.” Looking forward, Garlinghouse envisions XRP as the foundation of a new, more efficient global payment infrastructure that can replace outdated systems like SWIFT. As Ripple continues to expand its network and attract more financial institutions, the company’s vision of reshaping global finance seems increasingly within reach.