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AMERICAN BANKER: Is this Swift's answer to Ripple?

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Interesting read.

 

https://www.americanbanker.com/news/is-this-swifts-answer-to-ripple

“If you are a bank in Oklahoma and you need to make a payment to Mexico or Vietnam, unless you have relationships with banks in those countries already, you’re going to need an intermediary bank,” he said. “If the two banks don’t have the relevant KYC information, they’re not allowed by their compliance departments to send or receive payments between each other because they don’t know each other. In this situation, the only way to get to get a payment to a bank in Vietnam is to go through a correspondent bank. Whether that’s using SWIFT or another provider, it has nothing to do with the technology, it’s to do with legal, contractual and compliance agreements between banks.”

That is why the connections between correspondent banks are necessary and technology cannot remove them or even change them much, Raymaekers said.

 

Agreement with R3

At the end of January, Swift announced that it is partnering with R3 to have GPI Link work with its Corda Settler distributed ledger. News accounts gave the impression that the giant payment network was embracing the idea that faster distributed-ledger technology will replace the framework of correspondent banks, nostro accounts, and the store-and-forward messages that Swift maintains, and that Swift was going to use XRP, the digital currency of Ripple. The price of XRP shot up.

However, none of this is true.

Companies use R3’s Corda Settler to trade among one another. R3 is adding Swift’s GPI to the options Corda-Settler-using companies can turn to when they want to initiate a payment, besides using XRP. The payment itself will settle between banks as usual over the Swift network and the corporates will be able to track the payments. So this is actually a win for Swift over Ripple.

Edited by Lurker123
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44 minutes ago, Lurker123 said:

Companies use R3’s Corda Settler to trade among one another. R3 is adding Swift’s GPI to the options Corda-Settler-using companies can turn to when they want to initiate a payment, besides using XRP. The payment itself will settle between banks as usual over the Swift network and the corporates will be able to track the payments. So this is actually a win for Swift over Ripple.

Someone must tell this clueless author that this doesn't change the fact that SWIFT remains slow, expensive, non-transparent and insecure with 6-12% error rate and with the top banks sill profiting against the rest 99.9%, increasing the corrspondent banking problem + nostro/vostro accounts / liquidity problem. But yeah... "this is actually a win for Swift over Ripple.", said nobody reasonable and not paid by SWIFT... ever!

 

Edited by Panosmek

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SWIFT vs. Ripple (XRP) R3 there are so many articles about this. Now we have a banker saying something. Did they even interview a banker, truth is we don't know. We have a new article about this almost every day... We just have to wait and see how it goes.

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1 hour ago, Centaurus said:

 

"So this is actually a win for Swift over Ripple."

Can I suggest you remove your post before @galgitron sees it?

 

I think galg was of the same impression in one of his tweets.

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R3 corda = level playing field for XRP vs SWIFT GPI. Let the game begin on the same field.

I think there is truth that banks prefer suppliers that they truth. I know I trust a supplier I've used over a new one, because I know how it is going to work. How many of us have fallen for snake oil before promising great things. The difference is if a bank offers snake oil with other people's money they may wind up being hung, whereas me and you buying for ourselves just are like yeah that stuff was a lie. So the good thing that comes out of this will be banks will be able to choose XRP or SWIFT GPI where the risk is actually put on R3 Corda which may alleviate liability for the banks wanting to experiment with XRP. 

 

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59 minutes ago, Benchmark said:

SWIFT has no answer to Ripple's challenge other than being the incumbent with the advantages that come with it. 

Swift Director of Communication Alfred E. Neuman responds to Ripple's threat:

image.png.194872d3841ce5733e94adbe84a442a3.png

 

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3 hours ago, Panosmek said:

Someone must tell this clueless author that this doesn't change the fact that SWIFT remains slow, expensive, non-transparent and insecure with 6-12% error rate and with the top banks sill profiting against the rest 99.9%, increasing the corrspondent banking problem + nostro/vostro accounts / liquidity problem. But yeah... "this is actually a win for Swift over Ripple.", said nobody reasonable and not paid by SWIFT... ever!

 

The author may be right that banks will start using the settler first to interconnect their own FX tools, but to my understanding it is just the flippening of a switch to other settlement solutions/coins/markets supported by the settler, including the XRPL option.
As long are XRP markets (volume, liquidity, ...) and regulations do not meet banking standards, that switch will not be turned on, that's for sure. But ....once the (XRPL) option is AND market-ready And cheaper AND faster... why wouldn't they tumble it? 

It all sounds like it once was with the world wide web.... Today ALL data flows by that web but there WAS a time that none of the incumbents trusted such "new and unregulated platforms" over their proven technology being analog lines and datastreams like.... RS232. No way they would do it over IP, that channel was just for chatting geeks and games ;-) 

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10 hours ago, Lurker123 said:

Interesting read.

 

https://www.americanbanker.com/news/is-this-swifts-answer-to-ripple

“If you are a bank in Oklahoma and you need to make a payment to Mexico or Vietnam, unless you have relationships with banks in those countries already, you’re going to need an intermediary bank,” he said. “If the two banks don’t have the relevant KYC information, they’re not allowed by their compliance departments to send or receive payments between each other because they don’t know each other. In this situation, the only way to get to get a payment to a bank in Vietnam is to go through a correspondent bank. Whether that’s using SWIFT or another provider, it has nothing to do with the technology, it’s to do with legal, contractual and compliance agreements between banks.”

That is why the connections between correspondent banks are necessary and technology cannot remove them or even change them much, Raymaekers said.

 

Agreement with R3

At the end of January, Swift announced that it is partnering with R3 to have GPI Link work with its Corda Settler distributed ledger. News accounts gave the impression that the giant payment network was embracing the idea that faster distributed-ledger technology will replace the framework of correspondent banks, nostro accounts, and the store-and-forward messages that Swift maintains, and that Swift was going to use XRP, the digital currency of Ripple. The price of XRP shot up.

However, none of this is true.

Companies use R3’s Corda Settler to trade among one another. R3 is adding Swift’s GPI to the options Corda-Settler-using companies can turn to when they want to initiate a payment, besides using XRP. The payment itself will settle between banks as usual over the Swift network and the corporates will be able to track the payments. So this is actually a win for Swift over Ripple.

It’s typical for SWIFT to try and connect their upgraded but still outdated e-mail based correspondent banking system to Corda settler. It’s like trying to drive an old truck on the TGV (Train Grand Vitesse) infrastructure. We’ll see how it plays out but I quitelty hope they will fail miserabely.

SWIFT wil never allow transparant pay and settlement. It is against their believe system. SWIFT s nothing more than an e-mail payment flow control system for one super power (USA). It’s for single world domination and we need to get rid of it as soon as possible.

If we want a chance at realizing an open and democratic world for our children SWIFT must adapt to an open, honest and transparant society where we have a level playing field for all economies to flourish in. Not for the happy few or world shadow ‘control group’ (hiding technical and energy transforming inventions). After studying this subject for more then 40 years I sadly know how the dice rol.

We need change.:aggressive:

 

Edited by cryptoxrp

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2 hours ago, kanaas said:

The author may be right that banks will start using the settler first to interconnect their own FX tools, but to my understanding it is just the flippening of a switch to other settlement solutions/coins/markets supported by the settler, including the XRPL option.
As long are XRP markets (volume, liquidity, ...) and regulations do not meet banking standards, that switch will not be turned on, that's for sure. But ....once the (XRPL) option is AND market-ready And cheaper AND faster... why wouldn't they tumble it? 

It all sounds like it once was with the world wide web.... Today ALL data flows by that web but there WAS a time that none of the incumbents trusted such "new and unregulated platforms" over their proven technology being analog lines and datastreams like.... RS232. No way they would do it over IP, that channel was just for chatting geeks and games ;-) 

This is as I understand it as well.  I'm just not clear how the author reaches the conclusion that this is a definitive win for swift?  He is aware that XRP is an option through the corda settler, right?  Is he actually assuming that liquidity for XRP or regulations will prove a dead end forever and globally?  In certain corridors the xrp markets AND regulations are just now beginning to meet banking standards today.  Once its clear that payments from South Korea-Japan or Thailand-Brazil or Mexico- Philippines or many other of the high friction corridors are being SETTLED with XRP in less than 2 mins for nearly free and with no measurable volatility and risk than network effects will take shape.  Furthermore, the very institutions that will be pioneering the use of XRP have a global presence and once implemented into their flows for 2 corridors it will be very easy to switch to all available corridors.  

Now, the one thing thats unclear to me is whether R3 clients deciding to use XRP have the same flexibility as Ripplenet clients using XRapid to settle?  Will Multi-hop play a part in ramping up Corda Settler XRP adoption?  

Edited by aavkk

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3 hours ago, kanaas said:

The author may be right that banks will start using the settler first to interconnect their own FX tools, but to my understanding it is just the flippening of a switch to other settlement solutions/coins/markets supported by the settler, including the XRPL option.
As long are XRP markets (volume, liquidity, ...) and regulations do not meet banking standards, that switch will not be turned on, that's for sure. But ....once the (XRPL) option is AND market-ready And cheaper AND faster... why wouldn't they tumble it? 

It all sounds like it once was with the world wide web.... Today ALL data flows by that web but there WAS a time that none of the incumbents trusted such "new and unregulated platforms" over their proven technology being analog lines and datastreams like.... RS232. No way they would do it over IP, that channel was just for chatting geeks and games ;-) 

He is absolutely 100% correct that SWIFT gpi and XRP compete in Corda Settler (i also explain it here https://xrpcommunity.blog/xrp-vs-gpi/ ) but as i explain in the blog, this competition is actually perfect for XRP and eventually will be the winner. I'm only opposed to the fact that he said "this is a win for SWIFT". It's NOT a win it's the beginning of their end.

Edited by Panosmek

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I'm sure that the top banks, which benefit from the correspondent fees, are scrambling to do anything in their powers to stop Ripple from disrupting their cash cow. I'd imagine that the behind the scenes lobbying, the misinformation, FUDstering, and outright dirty tricks are a sight to see. (and a huge pita for Ripple to deal with) I've been impressed with how far Ripple has come so relatively fast. Their efforts to open these doors to what they've developed, is likely way beyond what any of us can really imagine. I'd have to agree, that it appears as if XRP will, through Corda-settler, become somewhat of a "backdoor" option for the banks connected to it. If xrp's liquidity increases sufficiently to begin to adequately carry the load, then it's "game on" and the momentum is going to ramp up very quickly. 

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