Ripple as an alternative to SWIFT in the international payment system

Abstract

Importance: Blockchain is one of the most advanced technologies of our time, capable of radically changing the traditional financial system, especially in the field of financial services. Transactions between countries remain one of the most difficult challenges regarding security, costs, and other regulations. SWIFT is currently the most widely used international money transfer system. Ripple, in turn, is one of the innovative payment platforms for international settlements based on blockchain technology and using its own cryptocurrency, known as XRP. Purpose: a comparative analysis of both technologies to find out whether the blockchain has the potential to transform traditional international settlement schemes. Research design: to achieve this goal, a set of scientific cognition methods was used, including analysis, synthesis, consistency, and comparison. This study examines the advantages and disadvantages associated with the functioning of the SWIFT and Ripple systems. Attention is focused on how the proposed new system functions. Results: the advantages of the Ripple system in comparison with the well-established financial messaging system have been identified according to criteria such as speed and efficiency, liquidity and currency support, and transaction costs. Despite certain disadvantages, SWIFT still holds a leading position in the field of international money transfers and is likely to retain its primacy in the near future due to the effect of scale. However, in the long term, new technologies such as Ripple have the potential to transform the money transfer industry and can greatly affect transactions between countries in the financial sector.