Will Ripple be able to replace SWIFT?

Ripple's digital token, XRP is only one of its many products. Most of the company's focus is on developing solutions for banks and financial institutions in order to be able to replace the SWIFT system with RippleNet.

Over the past 12 months when, decentralized cryptocurrencies have seen 1,000% growth. The global market capitalization of digital tokens has increased nearly 800%, from $40 billion to $200 billion by the end of 2017.

Ripple is one of the networks that has experienced massive growth in 2017. XRP, the digital token of Ripple, experienced a 4,000% growth. Ripple's XRP is currently second on the list in terms of market capitalization in the crypto industry. It is currently valued at $128 billion, which is more than the value of Uber, Slack, and Airbnb combined.

Ripple is not your usual altcoin

However, Ripple is different from its competitors. It is not made entirely of XRP and the digital token is just one of Ripple's products. Currently, Ripple has three main products:

  • xCurrent is their main product and is exclusively used by the company’s partner banks. xCurrent does not use XRP and instead uses RippleNet, a network that allows banks to seamlessly transfer funds across borders.
  • xRapid helps banks safeguard their credit when trading in emerging markets. It is the only product offered by Ripple that uses XRP. It is preferred by banks, as it allows them to free up money that previously being used for trading.
  • xVia is another product currently being developed. It will be released in early 2018 and does not use XRP. It is similar to xCurrent, but allows corporations to send money across borders.

Banks and corporations are hesitant to use XRP due to its volatile nature. In the past few weeks, XRP lost 50% of its gains that were made in the beginning of 2017. However, just hours ago, after announcing their partnership with MoneyGram, XRP’s price was soaring again. This strengthens the point of banks and corporations, and illustrates that XRP is just too fragile to use for commercial usage.

XRP won't be taking over the world anytime soon.

Out of the 100+ financial institutions that announced their inclusion in RippleNet, only one financial institution, Cuallix, is using xRapid. XRP won’t become the world’s dominant cryptocurrency any time soon, and frankly, Ripple is fine with it.

Ripple is currently focused on replacing SWIFT, which is the dominant system that is being used by banks to transfer funds. SWIFT has a 45-year-old history and has been responsible for moving most of the world’s money.

Ripple's xCurrent system is focused entirely on replacing the contemporary SWIFT system. However, SWIFT holds the majority share of the market and has strong relations with all the banks. Also, there is nothing stopping SWIFT from building its own blockchain to do what Ripple is trying to do.

Ripple is a major player in the crypto industry and is making its presence felt all over the world. It will be interesting to see what becomes of its projects in the coming years.

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