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Are Ripple and XRP Getting Ready to Replace SWIFT?

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Mon, 01/21/2019 - 10:41
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  • SWIFT has long been the go-to for cross border payments, but it is in dire need of an upgrade and Ripple believes they are the ones to do it

Cover image via U.Today
Contents

SWIFT, the Society for Worldwide Interbank Financial Telecommunication, provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment.

It has been in operation going on 46 years now and has become the global standard in sending money across borders. However, in its time, it has also picked up some undesirable issues, and it is also starting to show its age – now 46 years old.

It is for this reason that the disruptive power of blockchain technology is being touted as the future of cross border payments, but more specifically, Ripple and its XRP token are looking to be the new standard in this regard.

Ripple, in regards to cryptocurrencies, is probably most similar to SWIFT in that they do have a centralised control hub for their XRP token, but they also have a lot of the added benefits of being decentralised and on the blockchain.

SWIFT has become a political tool in the past, especially in relation to sanctions, and it is also totally reliant on the organisation for the continued running of the network. This is where Ripple can offer a lot more for payments across the globe.

Still running

The combination of having a controlling organisation, such as Ripple for the XRP token, while maintaining the decentralised benefits of a blockchain means that Ripple has a few edges over SWIFT that make it far more attractive for today’s financial world.

Ripple sales director Ross D’Arcy explained during a fintech conference in Croatia:

“I think SWIFT is a really interesting example. Because SWIFT, if you think about it, kind of crosses the lines sometimes and plays a bit of a political role. We don’t see our customers’ transactions. Our customers’ transactions go over the internet. So Ripple could shut down as a business tomorrow and our customers could still transact using our software. The same wouldn’t be the case with SWIFT.”

Non-political

Adding onto the statement from D’Arcy, XRP is a decentralised token that operates on a blockchain and because of this, it is not easy to manipulate or utilise as a tool. SWIFT has been controlled by the US government at times, making them exclude certain countries from the network in order to enact their sanctions.

However, with the XRP token, this will be extremely difficult as, even if Ripple Labs was to be coerced into doing the bidding of a government, they only have seven percent control of the validation of transactions.

A decentralised control that is appealing

Ripple’s benefits over SWIFT are quite clear as the outdated system suffers from a lot of legacy issues. But even the XRP benefits make it more attractive as a successor for SWIFT.

Ripple has been looking to appease and welcome regulators and governments, and by extension banks, by playing by the financial rules. This element of control makes XRP more appealing for companies and countries to adopt.

However, in an ever decentralising world, XRP’s blockchain offering means that there can be no monopolisation or manipulation when it comes to cross border payments.

About the author

Darryn Pollock is an award winning  journalist from Durban, South Africa. He picked up Vodacom’s Regional Sports Journalist Award in 2017 while expanding his Blockchain and cryptocurrency reach.  He is a contributor to Forbes, Cointelegraph, Binary District, and of course, U.Today. Darryn’s belief is that Blockchain technology will be the driving force of the next technological wave and it is the obligation of journalists and writers to tell its emerging story with integrity and pride.

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Sat, 03/28/2020 - 18:45
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  • Crypto investors do not see an alt season coming for many months ahead, as the crypto market corrects.

Cover image via stock.adobe.com
Contents

As the bitcoin price fails to see upside momentum, the crypto market is at risk of a deeper pullback in the short-term. While the bitcoin price sustained the $6,000 level for an extended period of time, altcoins have continued to see more downside.

Well-known trader DonAlt said:

“BTC looks like it could go up, down or sideways. Alts look like they could go down, down or down.”

The bitcoin price has been on a decline as of late primarily due to the drop in appetite for high-risk assets. Altcoins present additional risk, which investors are seemingly unwilling to take.

Altcoins seem battered, as crypto market loses tens of billions of dollars

Since March 7, within about three weeks, the valuation of the crypto market has dropped from $264 billion to $175 billion, by around $89 billion.

Consequently, altcoins underperformed against both the USD and bitcoin, as investors flocked to stablecoins like Tether.

After the overnight 5 percent drop in the bitcoin price, technical analysts foresee a steep drop ahead for bitcoin in the near-term. Strong support levels for bitcoin are found at $5,800 and $5,250, according to crypto trader Michael van de Poppe.

Poppe said:

“Brokedown after a distribution pattern and clear rejection of the $6,900 area. On the first support around $6,000-6,100 here. Might be testing $6,400 before continuing to drop, primary level for support is $5,800 and more heavily the $5,250 area.”

The altcoin index perpetual futures on FTX indicates a massive 56 percent drop in the altcoin market within merely 43 days, dropping to levels unseen since 2017.

The altcoin index perpetual futures on FTX drop as crypto market slumps
Source: TradingView.com

Market is exhausted

Similar to the U.S. stock market, based on the performance of altcoins in the past two weeks, it is highly unlikely that the altcoin market sees the so-called “alt season” until the global economy rebounds from the economic consequences of the coronavirus pandemic.

There is a clear lack of buy orders and buying demand across all exchanges and assets within the crypto market, increasing the probability of a larger correction to hit the entire asset class in the near-term.

As financial analyst Koroush AK said:

“Most businesses and individuals still have 1/2 months runway. Assuming handling the virus lasts several months not several weeks. Let's see how many want to be holding, let alone buying, bitcoin when struggling to pay bills and put food on the table.”

The low cash buffer of small businesses, which on average is estimated to be 29 days, leaves the U.S. and European economies at risk of continuous decline in the first half of 2020.

About the author

Joseph Young is an analyst based in South Korea that has been covering finance, fintech, and cryptocurrency since 2013. He has worked with various recognized publications in both the finance and cryptocurrency industries.

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