Ripple has claimed SWIFT is not a liquidity provider pointing to its “one-way messaging” pattern that has been condemned by many a number of financial experts.
Ripple, through its disruptive technologies adopted by many banks, forced SWIFT to up its game by sophisticating its payment processing standard that has not been looked into for many years.
CEO at Ripple, Brad Garlinghouse yesterday at a panel discussion featuring SWIFT’s chief executive Gottfried Leibbrandt, during the Paris Fintech, touted that decentralisation will win in the financial world, pointing afterward that SWIFT lacks this standard to go with the trend in the remittance world today.
“Decentralized systems I think over time are likely to win,” Garlinghouse said, adding that “I think that today that is not what Swift is.”
SWIFT is One-way System, but Ripple is not.
The Ripple CEO said “Swift today is a one-way messaging framework, it isn’t a liquidity provider”. He, however, praised Ripple’s outstanding cross-border payment protocol.
“When we think about an internet of value, it’s a mixture of two-way messaging frameworks — moving to a real-time chatting protocol if you will — coupled with real-time liquidity,” Garlinghouse raised.
The panel discussion could be seen a necessary debate between the two remittance kings. While Swift appeared not ready to employ blockchain technology. For the reason, it unveiled GPI in 2017 purposely to speed up its payment processing time, while lowering costs and making the system transparent at the same time.
The reason SWIFT failed to embrace blockchain is because of the volatility that comes with it.
“I think that the big part of Ripple’s value proposition is the cryptocurrency XRP,” Leibbrandt said, adding that SWIFT discovered that “banks are hesitant to convert things into a cryptocurrency right now because of the volatility in the currencies.”
Condemning SWIFT’s stand, Brad said the remittance company is propagating “misinformation” on the issue of volatility, saying “mathematically, there’s less volatility risk in an XRP transaction than there is in a fiat transaction.”
Brad believes that the absence of a controlling power over blockchain technology is a major advantage in the area of across-borders fund transfer.