XRP (XRP): implications of being recognized as part of payment systems
In February 2024, an IMF report mentioned XRP Ripple separately as a tool to facilitate cross-border payments and remittances. This caught the attention of companies and private investors, which caused the XRP cryptocurrency to boom, standing out from other digital assets.
Current situation
The Ripple blockchain was initially developed per the rules of international settlements, making its integration into traditional financial systems much more manageable. At the same time, Ripple's development has significantly reduced the number of intermediaries required for SWIFT and similar payment systems and optimized the transaction mechanisms themselves.
As of January 2025, hundreds of banks worldwide, including National Australia Bank (NAB), PNC Bank, Unicredit Group, Deloitte, and SBI Holdings, have integrated the Ripple payment platform.
For example, major US bank PNC Bank is using the Ripple blockchain (XRP Ledger) to speed up its payments, and Thailand's first bank, Siam Commercial Bank (SCB), has used this decentralized platform to launch its own service for external money transfers.
This, along with on-chain data, reflects that individuals and companies are increasingly willing to use the XRPL blockchain and its cryptocurrency. Ripple finds it increasingly easy to find new investors and partners to develop its ecosystem.
What can we expect in the future?
It is likely that more banks and other financial institutions will consider the XRP Ledger part of their payment system and use it for transactions.
For example, in August 2024, more than 60 Japanese banks formed a consortium to create a new payment platform based on the XRP Ledger blockchain, which is expected to be integrated as early as 2025. In this way, financial organizations in Japan plan to modernize the local economic infrastructure.
The secret of success lies in the efficiency of the Ripple blockchain platform compared to current financial systems. Experts even consider XRP Ledger to be SWIFT's main competitor.
This is possible due to such advantages as:
- High security. Decentralized systems are more complex to hack, and they very rarely fail because they do not have a single point of failure;
- Reduced number of conversions for cross-border transactions;
- Transaction speed in the XRP Ledger blockchain averages 3-5 seconds;
- Transaction fees are about 0.0001 XRP (less than a cent).
Not only are blockchain platforms significantly more efficient than current payment systems, but they are also much cheaper to maintain: they do not require the creation of bulky data centers and the hiring of hundreds of employees, which, among other things, also increases the cost of services for end consumers.
An example demonstrating the benefits of using the XRP Ledger blockchain is a transfer made by Arrington Capital: the company sent $50 million via XRPL in just three seconds, spending just $0.3. For example, a SWIFT transfer for the same amount would cost $1000 or more, and the transaction could take 3-5 days. This comparison is enough to appreciate the significant advantages of Ripple over existing traditional payment systems.
Recognizing Ripple as a payment system could lead to:
- The platform will be used universally by bank customers;
- The crypto industry will see an increase in investment, which will lead to the growth of the Ripple cryptocurrency in particular;
- New, more efficient payment platforms will be created based on the XRP Ledger platform, which in turn can also attract new investments and lead to the growth of the Ripple ecosystem;
- Finally, as the capitalization and liquidity of XRP cryptocurrency grow, its volatility will significantly decrease, making the altcoin even more attractive for investment.
This, in turn, threatens current financial systems, including SWIFT. Integrating new blockchain-based payment technologies such as XRP Ledger is inevitable, leaving banks and payment systems with only two options: developing their platforms to withstand the competitive onslaught or remaining on the margins of history.