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Blockchain Revolution Series: Ripple Versus SWIFT In Stiff Competition For Cross-Border Transactions
The Ripple has been popular among the banking community as its edge to transact overseas payments swiftly and efficiently is perceived as a competitive advantage, however, the banks have the current SWIFT mechanism (Society of Worldwide InterBank Financial Telecommunications) in place that seems unlikely to lose their importance in the industry so easily.
While the data from the World Bank divulge that the international trade involving remittances were valued at $1.93 billion in 2018. Wherein, the prospects that are imminent to lure abundant investment inflow from the aspirants. The global remittance is most likely to surge to over $8 billion within the next decade or so.
As ripple being a background blockchain in various banking operations, the banking firms intend to design and develop their own networks to improvise banking services. Ripple’s CTO, Mr.David Schwartz is propounding the latest projection at the origins and strategy behind the company’s XRP-based payment solution xRapid.
The SWIFT (Society for Worldwide Interbank Financial Telecommunication) in an observation, manages to show their transaction speed closer to that of Ripple. Hence, quite a few people perceive this as a potential hindrance to Ripple’s prospects through global expansion, as a result, XRP prices are little edgy from the last couple of months, losing over 45% in the last three months.
With a view of targeting to acquire major market share in cross-border transactions, Ripple has made strategic partnerships. They recently announced a collaboration with money transfer giant MoneyGram. Thereby, Ripple is reportedly in a pact to infuse up to $50 million in the form of capital to MoneyGram in exchange for equity over a two-year period. While MoneyGram is also expected to leverage the xRapid product, that is likely to enable the company to tap into on-demand XRP liquidity for cross-border payments, as per the announcement.
In yet another instance of remittance via crypto-mechanism is Euro Exim Bank’s announcement who deployed XRP-driven XRapid and xCurrent for overseas payment transactions. Euro Exim Bank has collaborated with Ripple, to improvise better connectivity with banks, payment providers and digital asset exchanges via RippleNet so as to ease clients’ seamless experience to operate with money globally.
The reputed multinational financial services companies have already become part of RippleNet, such as Japan’s MUFG bank and Spain’s Santander. MUFG has made announcements of its projects to a develop overseas transaction system between Japan and Brazil by deploying Ripple’s technology.