XRP News Today: Banks Doubt XRP’s Trust Factor as SWIFT Guards Financial Status Quo

SWIFT, the global financial messaging service, has rekindled the debate over the role of XRP in international banking, with Chief Innovation Officer Tom Zschach suggesting that banks are unlikely to adopt Ripple’s XRP as a settlement asset. Zschach argues that institutions prefer to rely on their own internal payment systems, tokenized deposits, or regulated stablecoins, which they control and trust. This perspective has been widely shared and interpreted by XRP skeptics as a potential setback for Ripple’s ambitions in the global payments market. Zschach emphasized that XRP is not a regulated asset, does not sit on a bank’s balance sheet, and lacks the legal enforceability that institutions require for final settlement [3].

The debate, however, reveals a fundamental divide in how institutions view cross-border payment solutions. Ripple’s XRP Ledger (XRPL) is designed to act as a settlement layer, enabling fast, cheap, and compliant transactions. Proponents argue that XRP’s role as a bridge asset allows for seamless liquidity transfers between currencies and stablecoins, eliminating the need for trillions of dollars currently locked in nostro and vostro accounts. This, they claim, addresses a critical inefficiency in the traditional banking system. Ripple’s recent regulatory efforts, including the launch of its regulated stablecoin Ripple USD (RLUSD), are seen as part of a broader strategy to align XRP with institutional requirements [5].

Zschach’s skepticism underscores a broader institutional preference for systems perceived as neutral, transparent, and governed by shared standards. He noted that institutions are more likely to adopt systems that are jointly managed and legally enforceable, rather than those controlled by a single entity. This stance highlights SWIFT’s long-standing dominance in global finance, with its messaging network facilitating secure and standardized communication between banks. SWIFT also pointed out that its infrastructure is continuously evolving, with ongoing trials to integrate tokenized assets and central bank digital currencies (CBDCs) into its framework [4].

Critics of SWIFT’s position argue that the network is a messaging platform and not a settlement system, and that it still relies on correspondent banking arrangements to move funds. This creates inefficiencies that XRP’s decentralized ledger aims to eliminate by providing 24/7 settlement finality without the need for intermediaries. The XRP Ledger’s ability to process transactions in seconds and operate continuously is a key differentiator in a world where speed and availability are increasingly valued. Moreover, Ripple’s expansion into regulatory compliance, including securing licenses and launching on-demand liquidity corridors, is seen as a strategic response to the concerns raised by institutions like SWIFT [3].

Analysts estimate that the global payments market could see a significant shift if XRP adoption gains traction. Some forecasts suggest that Ripple could capture 15% of the SWIFT market share within five years, driven by the inefficiencies it aims to resolve in cross-border transactions. The introduction of Ripple’s RLUSD stablecoin further supports this vision by providing a regulated on-ramp for banks to interact with the XRP Ledger. This hybrid model—combining institutional-grade compliance with blockchain efficiency—positions XRP as a viable complement to, rather than a direct competitor of, traditional payment systems [5].

The ongoing debate between SWIFT and Ripple reflects the broader transition in the financial sector toward digital assets and decentralized infrastructure. While SWIFT’s neutral governance and long-standing trust remain formidable advantages, Ripple’s innovations in settlement efficiency and regulatory alignment highlight a potential pathway for XRP to play a meaningful role in the future of global finance. As both organizations continue to evolve, the outcome of this competition will likely shape the landscape of cross-border payments for years to come.

Source:

[1] XRP In Focus as Ripple SWIFT Debate Escalates on Settlement Rails (https://coingape.com/end-of-road-for-xrp-ripple-vs-swift-debate-escalates-on-settlement-rails/)

[2] XRP Haters Celebrate SWIFT CIO's Comments Like It's the End of the Road for XRP (https://timestabloid.com/xrp-haters-celebrate-swift-cios-comments-like-its-end-of-the-road-for-xrp/)

[3] SWIFT CIO Tom Zschach says banks hesitate to adopt XRP due to governance, regulation, and settlement concerns (https://www.facebook.com/manuel.guevarra.369210/posts/swift-questions-ripples-trust-factor-swift-cio-tom-zschach-says-banks-hesitate-t/762828206630390/)