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HomeNewsRipple, Hedera, SWIFT, FedNow: A Clash of Titans in the Trillion-Dollar Finance...

Ripple, Hedera, SWIFT, FedNow: A Clash of Titans in the Trillion-Dollar Finance Realm

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  •  Traditional banks face pressure to improve cross-border transactions amid rising demand.
  •  Blockchain networks like Ripple, Hedera, and Stellar pose significant competition.

Global transactions have brought cross-border transactions into the limelight. According to statistics from the World Economic Forum, cross-border payments are expected to hit $250 trillion by 2027. Tanja Haase, Head of Swift Go, provided insights into the expectations of consumers and Small and Medium-sized Enterprises (SMEs) regarding international money transfers.

Global daily transactions, which amount to trillions of dollars, predominantly flow through banks, a position they’ve maintained for decades. However, traditional banks are yet to meet the growing demand for speed and ease of use. Although Fintech startups have emerged in a bid to change the narrative, they still lag behind apex banks.

Platforms like SWIFT have long held sway despite their shortcomings. However, a significant shift is underway as blockchain networks such as Ripple, Hedera, and Stellar gain prominence, posing a formidable challenge to industry big players.

Blockchain Technology: A Disruptive Force Challenging Banking Norms

Blockchain technology has emerged as a viable alternative to the conventional SWIFT-dependent banking networks to modernize global payment systems. In contrast to traditional systems, blockchain platforms like Ripple offer users speed and affordability. For context, the XRPL charges a nominal fee of 0.00001 XRP (equivalent to $0.0000055) for any money transferred, making it highly cost-effective.

To put this into perspective, a mere $1 could cover up to 181,000 transactions on the XRPL network. Conversely, a U.N. survey states that Africans pay up to 8% of funds received as one-time transaction fees.

Recognizing blockchain technology’s potential in the financial space, SWIFT, a major player in traditional banking networks, has collaborated with Ripple and Stellar. Ripple’s XRP is renowned for rapid transaction speeds, solidifying its reputation for accelerating global transactions compared to traditional financial systems. Similarly, Stellar facilitates faster and more cost-effective transactions, highlighting interoperability as its key feature.

Meanwhile, SWIFT announced that its Central Bank Digital Currency (CBDC) interoperability experiment is entering a new phase as three central banks begin beta-testing the innovative solution. As SWIFT, noted in an report, 30 financial institutions are experimenting with this solution. This development signals a move by traditional banks towards exploring more efficient and technologically advanced avenues in global payments.

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Olivia Brooke
Olivia Brookehttps://www.ethnews.com
Olivia Brooke has been immersed in the world of cryptocurrencies since 2018. Her current focus is on NFTs, though she remains dedicated to exploring and writing about all aspects of the evolving cryptocurrency sector. With a Master's degree in Economics, Olivia brings a sharp analytical perspective to her work, allowing her to thoroughly examine the economic and financial dimensions of digital assets and blockchain technology. Her in-depth knowledge and enthusiasm for the field make her an insightful voice on the ever-changing landscape of crypto. Business Email: [email protected] Phone: +49 160 92211628
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