SWIFT, a global leader in interbank payments, has expressed significant doubts about Ripple's ability to implement its XRP token in the traditional banking system.
Governance and Trust Issues for Ripple
Tom Zschach, SWIFT’s Chief Innovation Officer, pointed out Ripple's centralized control over XRP, which he claims is a major obstacle for banks. He stressed the need for neutral governance for financial institutions to trust new technology. The absence of such a structure at Ripple makes it less appealing to traditional financial organizations.
Legal and Economic Challenges for XRP
Zschach also raised concerns about XRP's lack of regulatory clarity, as it is not classified as money and does not appear on institutional balance sheets. This could deter banks from integrating XRP into their systems. He noted economic factors, asserting that with the rise of tokenized deposits and regulated stablecoins, banks might not see the need to adopt XRP.
XRP's Prospects in Traditional Finance
While Ripple continues its efforts to gain institutional legitimacy, it faces many obstacles. In contrast, SWIFT, with its long history and neutral governance model, holds a strong position in the financial market, exploring blockchain technologies alongside its existing systems.
Companies like Ripple must adapt to the demands of financial institutions to gain trust and the ability to utilize their technologies. Otherwise, existing leaders like SWIFT may maintain their dominant position.
