Ripple’s CEO, Brad Garlinghouse, made a bold prediction: XRP, Ripple’s cryptocurrency, will handle 14% of SWIFT’s transaction volume within five years. He emphasized that this refers to the liquidity aspect of SWIFT, not just the messaging system. Banks control the actual movement of money (liquidity), and that’s where XRP aims to make its mark.
The Big Picture: Tokenized Assets and Transparency
Ripple’s Chief Technologist, David Schwartz, highlighted the potential of blockchain technology to revolutionize corporate finance. He pointed out that blockchains offer built-in transparency, solving the age-old problem of verifying financial records and ensuring everyone is accounted for. This transparency, he believes, will drive widespread adoption.
Just How Big is 14%?
Garlinghouse’s claim is massive. Depending on how you measure SWIFT’s daily volume (around $5 trillion in daily messages or $150 trillion annually in cross-border payments), 14% translates to either roughly $700 billion daily or $21 trillion annually. Either way, it’s a huge amount, dwarfing the GDP of many countries.
Ripple’s Strategy: Focusing on Liquidity
Ripple’s strategy centers around providing real-time liquidity for banks using XRP. This approach aligns with their efforts since 2018 to help banks manage their funds more efficiently. They’re not competing with SWIFT’s messaging system; instead, they’re targeting the actual movement of money.
Ripple’s Recent Achievements
To achieve this ambitious goal, Ripple has been busy. They’ve recently unveiled:
- Support for institutional-grade tokenization.
- A revamped liquidity hub to streamline large-scale transactions.
The XRP Challenge: A Long Way to Go
Currently, XRP is the fourth-largest cryptocurrency, but its daily transaction volume is far below what’s needed to handle hundreds of billions of dollars. While XRP’s value has increased significantly, it still has a long way to go to reach Garlinghouse’s ambitious target. At the time of writing, XRP was trading at $2.25.
