Swift Cast Doubt On Ripple Coin For Banking Transactions

The popular financial services magazine American Banker, published recently that SWIFT’s international payment platform (GPI) is likely to push its’ competitors into a corner, which refutes the contrary claims of Ripple’s CEO Brad Garlinghouse. SWIFT’s GPI is currently being used in 80% of transactions, in at least 450 banks worldwide. These transactions have been estimated to process daily payments in excess of $300 billion.

The allure of GPI in the banking space, is largely due to its’ positive influence on the speed and transparency of the processed transactions.

SWIFT’s head of global banking Wim Raymaekers, commented on this, saying “Our banks are quite happy with the API-based technology we have in GPI, it produces a faster payment experience.”

For the sake of clarity, GPI does not directly hasten these transactions but does so indirectly by getting same-day confirmations from banks for its processed transactions.

Raymaekers reservations with Ripples blockchain technology lie in the issues concerning the transparency and speed of its transactions. The head of global banking at SWIFT is of the opinion that these issues remain unsolved.

In 2018, SWIFT performed an experiment using distributed ledgers, and the influence of the adoption of hyperledgers would improve the transparency of global transactions. This experiment also brought to light some privacy concerns “Banks have indicated they do not want to communicate how much money they have on an account to everybody else,” said Wim Raymaekers. “We had to keep the conversations private.”

SWIFT came to the conclusions at the end of the DLT experiment that the only way to maintain acceptable transaction transparency, was to utilize bilateral blockchains between transaction parties. Needless to say, this solution is too complicated for long term and functional use.

Raymaekers added “Our conclusion is that it’s quite challenging for banks to adopt a DLT-based system today.”

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