During the APEX 2025 event in Singapore, Ripple CEO Brad Garlinghouse highlighted XRP's potential in international financial transactions.
How Does XRP Stand Out From SWIFT
SWIFT is a longstanding infrastructure in international bank transfers, primarily serving as a messaging service that informs financial institutions about transfers without actually moving funds. This system relies on numerous intermediaries, thereby lengthening transaction times and increasing costs. In contrast, Ripple provides a system where messages and funds are transferred simultaneously and directly. Garlinghouse is confident that Ripple’s system could reshape how banks manage liquidity in global transactions.
What Gives Blockchain Technology Its Liquidity Advantage
Ripple utilizes blockchain to offer a much quicker and efficient service compared to traditional models. By leveraging XRP as a bridge currency, Ripple facilitates instantaneous and cost-effective conversions between different currencies. This innovation reduces the reliance on keeping high levels of local currency liquidity across various countries, cutting down banks’ operational costs significantly.
Ripple’s approach integrates both fund transfers and message conveyance into a single process via blockchain, potentially improving transaction speed, transparency, and reducing risks. The adaptation of such technology, however, hinges on the speed at which financial institutions and regulatory bodies embrace it.
Concrete Takeaways from Garlinghouse's Prediction
• XRP could secure 14% of SWIFT-dominated international transactions in five years. • The system reduces the need for banks to hold large reserves of local currencies. • Simultaneously transferring funds and information could streamline transactions globally. • Blockchain enhances transparency and could lower costs and risks in global finance.
Ripple's ambition to redefine international finance with XRP is contingent upon how quickly traditional financial sectors and regulatory frameworks can adapt to new technologies. Building trust in these novel processes will be pivotal for achieving widespread acceptance and success in international financial systems.
