- SWIFT is reportedly “actively” testing the integration of XRP and HBAR into its system to enhance its cross-border payment capabilities.
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is looking to adopt blockchain solutions for cross-border payments. The intentional money transfer facilitator is reportedly testing XRP and Hedera (HBAR) for this purpose.
SWIFT Adopting XRP and HBAR Solutions
Last year, SWIFT announced its plan to support digital assets and currencies. The international payments processor aimed to implement its vision by this year, which could boost its network that covers over 11,000 institutions in 200 jurisdictions.
Fast-forward to the present, OKX reported that SWIFT is already “actively” exploring blockchain-based solutions. At the forefront of the institution’s current tests are XRP and HBAR due to their alignment with ISO 20022 standards.
According to HSBC, ISO 20022 is a flexible standard for financial messages. It enables scalability and interoperability between financial institutions, market infrastructures, and banking customers. It recommends that all banks follow the standard to continue processing payments while encouraging customers to do the same.
Overall, the system ensures the elimination of traditional payment rails to promote streamlined, more accessible, more efficient, and faster transactions, thus ensuring a better experience for customers. It also incorporates measures to enhance compliance processes, improve network resilience, and provide better safeguards against fraud.
Diving Deeper Into SWIFT’s Blockchain Shift
OKX claimed SWIFT plans for the incremental adoption of blockchain solutions to gradually improve its system without introducing operational disruptions. It appears to be a measured response to the growing preference of retail users and institutions for digital assets like XRP and HBAR for cross-border payments and remittances due to their inherent advantages.
For comparison, assets like XRP significantly reduce settlement times for international transactions as fast as three to five seconds. Then, each transaction could only cost as low as $0.0002.
On the other hand, the traditional SWIFT medium takes one to five business days to finalize a transaction. Meanwhile, it charges $10 to $50 per transaction. The numbers don’t even count foreign exchange conversions or hidden fees from intermediaries and transacting banks.
SWIFT is currently evaluating how it can leverage Ripple’s On-Demand Liquidity (ODL), which uses XRP as a bridge currency, to enhance its cross-border payment capabilities. Additionally, it is assessing the HBAR hashgraph’s high throughput capacity of 10,000 transactions per second (TPS) and high energy efficiency to offer an alternative to enterprises seeking scalable solutions.
The move follows the bold declaration of Ripple CEO Brad Garlinghouse that they are gearing up to capture 14% of SWIFT’s market by 2030. Based on SWIFT’s data, it caters to 44.8 million FIN (Financial Information Network) messages daily, with volumes around $7.5 trillion. If Ripple indeed manages to fulfill its vision, it could translate to a $1.05 trillion market share.
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