Ripple CEO Brad Garlinghouse highlighted the potential of XRP Ledger (XRPL) to revolutionize the global banking and payment system. He believes XRPL can emerge as a formidable alternative to traditional systems.
Benefits of XRP Ledger
Brad Garlinghouse noted that XRPL provides liquidity and messaging solutions. Ripple's new architecture can replace SWIFT's older infrastructure and the liquidity provided by other global banks, such as Citi. The core innovation of XRPL lies in combining liquidity and messaging into a single solution, unlike SWIFT's limitations.
Drawbacks of SWIFT
According to Garlinghouse, the SWIFT protocol has a 6% error rate due to mismatched information such as account details, leading to delays and reversals in transactions. SWIFT is a one-way messaging platform, requiring manual correction for errors and inaccuracies, which adds to the delays. Ripple's technology offers real-time feedback, reducing the error rate to a negligible 0.1%.
Potential for Change
Ripple's technology uses a decentralized approach to facilitate real-time settlement, reducing cross-border payment times from days to mere seconds at a fraction of the cost. The BRICS nation bloc is already looking for a SWIFT alternative, and Ripple’s XRPL can find a sweet spot here, showing significant potential to disrupt the global banking system.
Thus, Ripple’s technology aims to overcome the limitations of current systems by enabling quicker, more efficient, and affordable cross-border payments, potentially bringing significant changes to the global financial system.
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