Ripple’s XRP chain is gaining exposure towards the vast majority of SWIFT-compliant banks. Within a massive structure of 11,000 banks & payment providers, there’s two requirements to be met for banks wanting to use Ripple’s XRP as a liquidity layer on SWIFT.
XRP’s “Multiple Entry Points” Into SWIFT Deciphered
Firstly, there’s the Cross Border Payments and Reporting Plus messaging certification, a predecessor to SWIFT’s ISO 20022 global standard. Rolling out the ISO 20022, the European financial conglomerate expects to dramatically reduce the processing windows, seeking for an instantaneous solution.
Here’s where the multi-chain blockchain ledger approach comes into play – Ripple has “multiple entry points” here, according to blockchain researcher SMQKE. The popular analyst then goes deeper into SWIFT’s Transaction Management Platform upgrades, enabling API-based messaging that Ripple’s XRP has been built for from day one.
The new SWIFT platform enables Distributed Ledger Technology (DLT) & various digital assets to flow through the network natively, which perfectly makes sense following the SWIFT’s multiple announcements of a multi-chain network development. SWIFT acquired a role as the ultimate plug, connecting different blockchains to traditional banking systems.
SWIFT’s New API Channel Now Supports Blockchain
Abiding by the CBPR+ framework, Ripple can participate in cross-border transactions across the region without many limitations. The American fintech company already inked two licenses in the United Kingdom (UK) & Luxembourg, opening paths to TradFi for both XRP & RLUSD.
As for ISO 20022, the richer-than-ever data standard maintains a new transaction platform, adding flexibility. As described in the leaked document, “members can choose to benefit quickly from rich data without needing to wait for all parties in the payment chain to use ISO 20022”.
In theory, that’s great news for a natively ISO-supporting DLT chain like Ripple’s XRP Ledger. For the first time ever, an API channel is provided for the community to participate in open banking, merging digital & traditional finance to their own needs.
So far, SWIFT’s blockchain testing initiatives have included around 30 banks linked to Ripple, including Europe’s giants like Santander, Barclays & Deutsche Bank. This June, the Global Payments Innovation (GPI) rails are tested for the $155 trillion cross-border market.
Judging from the docs provided, a huge portion of the technical development is done by R3, a developer enterprise working on Corda – the SWIFT-native platform that’s supposed to connect both sides of the camp in a seamless way.
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People Also Ask:
SWIFT is the global messaging system that most banks around the world use to send instructions for international money transfers. Think of it as the “text messaging service” for banks — it doesn’t move the actual money, but it tells banks where and how to send it.
XRP is the native cryptocurrency of the XRP Ledger, created by Ripple. It’s designed to move value very quickly and cheaply across borders, often used as a “bridge” currency to make international payments faster and cheaper.
There is no affirmed connection where XRP is built into SWIFT directly. Instead, XRP connects indirectly through third-party companies that already work with SWIFT.
ISO 20022 is a new global standard for how financial messages are sent. SWIFT is slowly switching to this standard. Because XRP Ledger and Ripple’s tools already support ISO 20022, it becomes much easier for them to work together with traditional banking systems.
Yes, but it’s optional. Some banks that use the right software can choose to use XRP for faster and cheaper cross-border payments. However, most banks still prefer using traditional methods and haven’t fully turned on XRP features yet.
