The banking systems presented forward in the name of Swift (Society for Worldwide Interbank Financial Telecommunication) and IBAN (International Bank Account Number) are widely used by banks, businesses, and individuals to perform operations of money transfers in the modern day. But with the crypto framework booming on the international scale, Ripple has aimed to step in this race to become the next leader in the game of money transfer. In an interview with a news agency, Brad Garlington, the Chief Executive Officer of Ripple Labs Inc. recently stated:
The technologies that banks use today that Swift developed decades ago really hasn’t evolved or kept up with the market,
Brad further added:
Swift said not that long ago they didn’t see blockchain as a solution to correspondent banking. We’ve got well over 100 of their customers saying they disagree.
Ripple is a blockchain-based project whose currency XRP mainly serves as an intermediate currency for payments done in other cryptocurrencies. It can also be considered as a proxy currency in the Ripple ecosystem. As new and new technological innovations are being made, financial firms are now seeking technologically advanced methods to perform operations of money transfer.
Brad Garlinghouse also exclaimed Ripple’s intentions to overtake the traditional systems of Swift and IBAN. Brad has denied the rumors of a potential link-up between Swift and Ripple. Instead, the company aims to take over the dominance shown by Swift by presenting forward a more transparent and technologically advanced financial framework, built according to the needs of the modern world.
One of the advantages presented forward by Ripple is its transaction time. The average transaction time on the Ripple network is only 4 seconds, unlike the hours that are taken on the bitcoin network. Besides, traditional banking systems often take days to perform heavy duty money exchanges. Ripple aims to enter the banking arena might just revolutionize how business and big financial firms see global money exchanges.
Currently, Ripple Labs claims that more than a hundred banks and payment providers are using the RippleNet network. These include giants like Mitsubishi UFJ Financial Group Inc. and Standard Chartered Plc.
Ripple Labs Inc. essentially develops and distributes payment protocols for different parties and makes them open-source. The US-based technology company provides a gross settlement system alongside the facilities of currency exchange and remittance network. The virtual currency used in the ecosystem provided by Ripple is XRP, which recently gained much attention as it crossed the second biggest cryptocurrency ethereum on CoinMarketCap.
The intent shown by Ripple in terms of overtaking the Swift and IBAN do not come across as too ambitious. We have witnessed the rise of blockchain technology in the past few years and the prospects that are offered by it cannot be denied at all. The biggest advantage that blockchain technology provides is the elimination of the third party from the scene. Money transfers can take place without interference from intermediate banks or financial institutions. As a result of such a framework, the cost of fees charged by the banks is taken out of the scene immediately.
Another big advantage that this technology offers is transparency. In a blockchain network, the record of all the happenings of a network is kept by every node participating in the network. The distributed ledger framework employed at a blockchain’s core makes sure that every node in the network is up-to-date with all the happenings of the network. This makes the entire system auditable and secure. With the entire record available to all, the chances of forgery done by third-parties are also eliminated.
The blockchain technology also provides a network that is global, transcending the borders presented forward by countries. Hence, the entire arena of international payments is changed and money transfers can take place between entities sitting in different parts of the globe with any boundary restrictions and additional fees from the third parties.
The goals presented forward by Ripple do not seem out of reach as blockchain is certainly the technology of the future. Financial frameworks across various industries are being revamped through the employment of this nascent technology. It was just a matter of time someone stepped up with the aims of replacing the traditional banking systems through the usage of this technology and Ripple seems to be just the project that might be able to do so.
The link to the complete interview done by Brad Garlinghouse can be found here.