Ripple CEO Brad Garlinghouse has made it clear that Ripple is not partnering with SWIFT, the global messaging system considered the backbone of cross-border banking. According to a clip at an old Ripple Swell event now circulating among XRP investors on the social media platform X, Garlinghouse emphasized that Ripple is not working with SWIFT but instead aims to replace it. This comes as Ripple is starting to increase its global push, expanding partnerships with banks and financial firms while also securing a new US patent on instant cross-border payments.
Ripple Targets SWIFT’s Flaws
Garlinghouse pulled no punches as he detailed the shortcomings of SWIFT’s infrastructure, describing it as slow, costly, and prone to human error. “SWIFT has a reported error rate of 6%,” he noted, citing insights from a Fortune 50 CFO who observed an even higher 11% failure rate in their company’s cross-border transactions. These failures often demand manual intervention, leading to delays and unnecessary costs.
However, Garlinghouse pointed to an even deeper flaw in the traditional system with trapped liquidity. According to him, estimates from major consulting firms suggest as much as $10 trillion is currently locked in nostro accounts worldwide just to support the existing correspondent banking model. Ripple, through XRP and its On-Demand Liquidity (ODL) solution, aims to unlock this capital.
In a move that backs this ambition, Ripple recently secured a US patent for trust-based, instant cross-border payments, which is a system that does not require full network confirmation to execute transactions. This innovation could allow XRP to fully bypass the delays inherent in legacy systems, further making it a serious replacement for SWIFT.
Ripple’s Global Network Expanding
Ripple’s global expansion tells its own story. Banks in the Philippines, Brazil, India, Mexico, and the UAE have already adopted Ripple’s solutions, with XRP being used to facilitate real-time international settlements without the need for pre-funded accounts.
However, Ripple isn’t the only player progressing, as SWIFT also seems to be stepping up. In response to blockchain challengers like Ripple, SWIFT has teamed up with Chainlink to improve its infrastructure.
SWIFT’s partnership with Chainlink is looking to take advantage of Chainlink’s Cross-Chain Interoperability Protocol (CCIP) for transfers of tokenized assets across multiple blockchains.
The financial messaging giant has already run pilot programs, including one with UBS Asset Management, that show promise in bringing blockchain capabilities into the legacy system. These developments show that SWIFT is not ready to cede its position, but the company is only now reacting to a race that Ripple has already been running for years.
On the other hand, Brad Garlinghouse also stated in a recent summit that Ripple is aiming to take over SWIFT’s customer base. Particularly, the company is aiming to take over at least 14% of SWIFT’s current cross-border volume within the next five years.
