Ripple’s XRP Looks Best-Placed To Benefit From SWIFT

The rising compatibility between Distributed Ledger Technology (DLT) and SWIFT’s ISO 20022 global messaging standard is putting XRP back in focus. Ripple’s native coin is coded in a way aimed at native compliance with this gold standard. That’s why XRP’s status is rather unique in comparison to Stellar Lumens (XLM) or Hedera Hashgraph (HBAR).

ISO 20022 Roll-out Strengthens The XRP Case

ISO 20022 is an established international standard for financial messaging that enables richer data alongside quicker cross-border transactions. The ‘nocash’ Magazine article depicts a story where XRP is used alongside CBDCs in centralized payment systems as a bridge currency and a complimentary liquidity provider via On-Demand Liquidity (ODL).

That’s an XRP-powered technology that allows major banks to swap between XRP and local currencies in a seamless manner. That solves the immediate cross-border payment challenge for SWIFT-compliant banks, enabling Ripple’s tech stack to enter corporate corridors all across the globe. The question is how much of SWIFT’s volume can XRP fetch.

Ripple’s CEO once predicted a 14% capture of SWIFT’s $155 trillion annualized trading volume. On the other hand, Ripple’s own acquisition of GTreasury saw $13 trillion in processed transfers last year, but none of that came in digital assets, and this year they may be bridging that gap. SWIFT’s ISO 20022 requirements ask all banks to apply the new standard by year-end.

XRP Edging Out Bitcoin Due To Compliance?

This could put more of the traditional cross-chain transaction regime on-chain. However, blockchain researcher SMQKE notes that transition could trim Bitcoin’s (BTC) market dominance if the apex asset sees less compliance than XRP on a global scale.

Not everyone agrees with that. To draw a clear example, analyst Macro Bombastic said “Bitcoin doesn’t need ISO 20022 to keep doing its thing”. That argument is true: Bitcoin’s (BTC) trading volume is constantly leading the market with tens of billions in transactions per day.

But being named alongside CBDCs brings XRP to a whole new level. According to the latest reports, nearly 80% of all countries are testing their own versions of local digital currencies. Being to participate in the same treadmill of cross-border trading serves XRP a tremendous advantage.

What’s being said in the article cited by SMQKE is clear: it states that ISO 20022 is the decisive test for how different traditional finance (TradFi) institutions are able to adapt to new technology. Ripple’s XRP has a unique status in the SWIFT puzzle due to native alliance with its code.

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