The partnership between Ripple and Finastra has the potential to change the international payments landscape, providing access to numerous banks through SWIFT. This move allows Ripple to get closer to the traditional financial system.
A New Era of Payments: Who are Ripple and Finastra
Ripple, the third-largest cryptocurrency with a market capitalization of around $167 billion, is expanding its capabilities through integration with Finastra. Finastra is an established fintech company that works with most of the largest banks in the world. This partnership, which started in 2019, is now becoming more active as Ripple aims to deepen its involvement in traditional financial networks.
Benefits of the Partnership for Ripple and Finastra
Currently, RippleNet connects about 200 financial institutions, which is significantly smaller than the 11,000 accessible through SWIFT. However, the collaboration with Finastra could prove beneficial for both sides, expanding Ripple's reach while providing Finastra’s clients with faster and more efficient payment options. "This partnership will enable Ripple to expand the reach and solutions for our partners, and the footprint of RippleNet, while allowing customers to transact directly with each other," said Marcus Treacher, former Senior Vice President at Ripple.
SWIFT's View on Competition with Ripple
Ripple advocates argue that the company’s technology could potentially challenge SWIFT’s dominance in the international payments market. However, Tom Zschach, SWIFT's Chief Innovation Officer, pushed back against this notion, stating, "SWIFT doesn’t issue assets, doesn’t compete with members, and is structured as a cooperative with more than 11,000 institutions." He also acknowledged that while public blockchains offer valuable features, they still lack the neutrality required to operate in truly global markets.
The partnership between Ripple and Finastra opens new horizons for international payments, potentially deepening the integration of blockchain technologies into the traditional financial system, despite existing challenges posed by SWIFT.
