Traditional perceptions often portray the SWIFT network and Ripple’s blockchain platform as separate entities, even rivals in the cross-border payment landscape. However, a recently revealed technical method could bridge these two systems without requiring formal partnerships. This technology leverages existing financial institutions’ infrastructure to create an unofficial but highly functional link between SWIFT’s messaging standard and Ripple’s modern settlement capabilities.
Crypto researcher SMQKE (@SMQKEDQG) on X demonstrated this concept through a diagram and analysis, highlighting how SWIFT GPI can tap into RippleNet and XRP via HTTPS and APIs, eliminating the need for direct SWIFT to Ripple connections. This allows banks to directly utilize Ripple’s functionalities without formal partnerships.
The process begins when a bank initiates a cross-border payment using SWIFT’s Global Payments Innovation (GPI). The GPI message, in its standardized MT103 format, is sent to the recipient institution. However, instead of remaining within the correspondent banking system, it can be redirected through the receiving bank’s internal systems. These systems, often powered by platforms like Temenos, SAP, or CGI, are configured to parse incoming MT103 data and trigger separate workflows.
The Ripple Integration Point:
With this point in place, the payment flow shifts from traditional rails to digital settlement.
Instead of relying on correspondent banks, the bank’s software can initiate secure HTTPS calls to Ripple. This conversion allows for an expedited transfer using the company’s platform.
SWIFT network’s role ends after the GPI message reaches the bank. What follows is the bank’s decision to utilize Ripple as a settlement layer, retaining the familiar SWIFT interface for clients while utilizing Ripple internally for faster execution.
Real-time Settlement with XRP:
The instruction enters Ripple and can be settled using XRP through On-Demand Liquidity (ODL). This process eliminates the need for pre-funded nostro accounts. Funds are exchanged on a digital asset platform, transferred across the XRP Ledger within seconds, and then converted back to local currency at the destination.
This method promises near-instant settlement, eliminating delays from traditional banking processes. This innovative approach could reshape global finance by replacing legacy systems with modern blockchain solutions.
Disclaimer: The views expressed in this article are for informational purposes only and should not be considered financial advice. Readers are advised to conduct thorough research before making investment decisions.
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