A recent demo compared to SWIFT shows how XRP can facilitate remittances between the US and Japan, cutting costs and saving time.
Ingrid, a US-based software engineer, has made a live demonstration comparing the cross-border payment processes of blockchain-based payment firm Ripple and the traditional settlement provider SWIFT.
Taking to X, the developer, known for his pro-XRP stance, posted the clip demonstration. He particularly compared sending funds between financial institutions in the United States and Japan using the solutions of Ripple and SWIFT.
Ingrid aimed to showcase XRP as a game-changer digital asset in the cross-border payment landscape.
🔗 RIPPLE vs SWIFT: Realtime Cross-Border transactions between US Banks and Japanese Banks.
"Japanese Financial Giant to Use Ripple (XRP) For International Remittances." 𝘚𝘦𝘱𝘵 2023
— Ingrid 🇨🇵 🇺🇲 👁️🗨️ (@IBcroc) September 17, 2023
The Process for SWIFT
According to the clip, the SWIFT system finds a link between the source and destination banks once the sender’s bank initiates the transactions. It does this process by two correspondent banks.
In particular, the sender’s bank moves the fund to its dedicated correspondent bank, attracting a fee. The sender’s correspondent then moves the money to the receiver’s correspondent, attracting another fee.
Meanwhile, the clip indicated that the link between the two correspondent banks also takes a fee. The final lap of the fund movement sees the destination bank receiving the money with at least three rounds of charges.
The Process for Ripple
On the other hand, the software engineer demonstrated the process for Ripple using two scenarios. They involve using RippleNet xCurrent with and without XRP.
In the first case, the sending bank merely connects to RippleNet xCurrent. This method allows for real-time communication between all the parties involved in the transactions.
In other words, the sender’s bank, sender’s correspondent, receiver’s correspondent, and receiver’s bank communicate simultaneously, processing the funds instantly without delay.
Notably, the process also attracts multiple charges. Meanwhile, according to the clip, using XRP in RippleNet for the same procedure attracts only a fraction of the cost.
The sender’s bank transfers the funds using XRP from its account in real-time. Passing through Ripple, the receiver’s bank gets the sent XRP. Upon receipt, it connects to a local third-party liquidity provider to exchange the XRP for the desired local currency.
While Ingrid’s clip was a demonstration using XRP, such a process already happens in Asia. Specifically, The Crypto Basic has reported that Japan payment giant SBI commenced remittances between Vietnam, the Philippines, and Indonesia using XRP.
According to the report, Ripple partner Tranglo will facilitate the exchange of XRP to local currencies.