Market analyst and software engineer Vincent Van Code has recently shared his thoughts on the SWIFT vs Ripple debate, providing a speculative analysis of their roles in global finance and the potential for future integration. He emphasizes that his perspective is based purely on observation, not insider information.
SWIFT’s Role in the Financial System
Van Code outlines that SWIFT is fundamentally a messaging system rather than a money-moving entity. It facilitates international transactions by sending secure payment instructions between banks, but the settlement process depends on the correspondent banking network. He notes that SWIFT does not transact value directly or hold accounts, making it reliant on the existing fiat system and the liquidity provided by individual banks.
He also highlights SWIFT’s strategic importance to U.S. financial dominance. The system has been a key instrument for enforcing economic sanctions and controlling access to global finance, contributing to geopolitical leverage for decades.
RippleNet as a Real-Time Settlement System
In contrast, Van Code explains that RippleNet operates as a real-time settlement network capable of transferring actual value across borders. It can utilize both XRP and stablecoins to facilitate transactions, offering near-instantaneous transfers at lower costs compared to traditional banking mechanisms.
He suggests that Ripple was initially perceived as a competitor to SWIFT, but the financial industry has increasingly recognized that distributed ledger technology (DLT) provides a more efficient settlement infrastructure.
The Potential for SWIFT to Integrate DLT
Van Code says that SWIFT may eventually upgrade its backend to incorporate DLT. He clarifies this would go beyond simply issuing a digital currency and would require a blockchain network optimized for cross-border transactions, liquidity, and scalability. He acknowledges that this would be a significant challenge but implies that such a development is within the realm of possibility.
Ripple’s Strategy about SWIFT
Van Code speculates on Ripple’s strategic approach, suggesting that the company may have pursued two simultaneous objectives: creating a competing product while ensuring compatibility with SWIFT’s infrastructure.
He argues that major financial and institutional shifts do not occur through direct partnerships but rather through the establishment of credible alternatives. By building traction and positioning itself as a serious player, Ripple may have increased the likelihood of future collaboration with SWIFT.
He outlines a potential roadmap for Ripple’s strategy, beginning with the development of RippleNet, onboarding financial institutions, and establishing itself as a viable competitor. This, in turn, would have drawn the attention of SWIFT and potentially set the stage for discussions on integration or parallel development paths.
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Hypothetical Developments and Regulatory Considerations
Van Code suggests that Ripple may have initially approached major institutions, including SWIFT, to propose DLT collaboration. However, he speculates that the U.S. government, focused on maintaining the dominance of the U.S. dollar, may have intervened to assess the implications. He also raises the possibility that Ripple proposed a USD-backed stablecoin (RLUSD) while continuing to position XRP as a neutral bridge asset.
He further hypothesizes that regulatory scrutiny, including the SEC lawsuit against Ripple, may have been influenced by broader geopolitical considerations. Meanwhile, he suggests that Ripple and SWIFT, or RippleNet-compatible entities, may have continued their work behind the scenes.
Van Code acknowledges that his analysis is purely speculative but argues that major financial integrations of this scale typically take five to ten years to materialize. He suggests that if Ripple and SWIFT are indeed working together, the early stages of their collaboration may only now be coming into view.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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