A recent SEC meeting with Ripple marked a significant step toward blockchain adoption in U.S. government institutions. The proposal suggests replacing the outdated SWIFT system with the XRP Ledger for cross-border transactions.
Revolutionizing Government Transactions
The SEC has introduced a unique initiative to cut government transaction fees by utilizing the XRP Ledger, potentially reallocating funds to acquire Bitcoin. The proposal involves shifting 30% of the $5 trillion U.S. government holdings in Nostro accounts to XRPL via Ripple's On-Demand Liquidity.
Why XRPL Over SWIFT?
The advantages of XRPL over SWIFT are clear: - **Speed**: Transactions settle in 3–5 seconds compared to SWIFT’s 2–3 days. - **Transparency**: XRPL maintains an immutable on-chain record without compromising user privacy. - **Cost Efficiency**: Transactions are significantly cheaper than SWIFT’s high fees.
Understanding Nostro Accounts & SWIFT
Nostro Accounts are foreign bank-held deposits used for cross-border transactions, with $5 trillion owned by the U.S. government globally. SWIFT, the current global interbank messaging system, is set to be phased out by November 22, 2025.
Government adoption of the XRP Ledger may accelerate its adoption by corporations. XRP, as the primary token for transaction fees on XRPL, could experience significant growth.
