Brad Garlinghouse, Ripple Labs’ CEO, has been talking to Bloomberg TV about the utility factors of the firm’s technology and told the interviewer that “any digital asset in the long-term is going to be valued based upon the problems it’s solving.”
Ripple is a leader in solving the problems of large asset transfers across borders and now has dozens of large institutional clients using its products. Garlinghouse told Bloomberg that at least 100 SWIFT-connected banks have signed up to use Ripple’s xCurrent product, including the gigantic Santander Group.
This is not good news for SWIFT, which is the acronym for Society for Worldwide Interbank Financial Telecommunication, a system that is used alongside the International Bank Account Number (IBAN) for sending and receiving money. Garlinghouse believes that the banks are looking for a system that is faster and more up-to-date than this, and Ripple supplies the solution. He also said that contrary to the opinion of those running SWIFT, the blockchain and cryptocurrencies can play a vital role in the banking sector. As he said,
“SWIFT said not that long ago they didn’t see blockchain as a solution to correspondent banking. We’ve got well over 100 of their customers saying they disagree.”
One recent rumour he was anxious to dispel was the one about Ripple partnering with SWIFT. Some claim that Ripple’s XRP token traded high last week based on this idea that the two were partnering on RippleNet. Garlinghouse put this idea to rest when he said, “What we’re doing and executing on a day-by-day basis is, in fact, taking over SWIFT.”
The question that has yet to be answered is whether or not Ripple can make SWIFT redundant. For the moment, SWIFT remains the primary means of large and small transfers across borders, at least in the countries it legally operates in. However, cryptocurrency, blockchain and distributed ledger technology presents a unique opportunity for banks and investors, as well as other members of the financial community to break down banking borders and become more flexible.