Ripple CEO Brad Garlinghouse recently held a discussion about how global regulations could potentially promote institutional adoption of nascent technologies as well as its impact on traditional payments systems such as SWIFT.
As it stands, Ripple’s blockchain payment solutions have been increasingly gaining traction among financial institutions across the globe, as more U.S. and Saudi Arabian banks have begun adopting the technology, while Japan and Brazil have also recently partnered to integrate Ripple’s cross-border payment platform.
In a Bloomberg interview published November 13 during the recently held Singapore Fintech Festive, Garlinghouse talked about the impact of global regulations on institutional investor adoption, explaining that:
“You need a global framework and you’re seeing some countries really lean in and be progressive and provide that clarity. Here in Singapore, the MAS [Money Authority of Singapore] has been truly a leader. That’s also true in Thailand and, even to some degree, in the Philippines and Japan. Other markets have been slower. Even in the United States, there’s some lack of clarity, particularly around the SEC and some things that they’ve announced around ICOs but there’s still work to be done on that. But I think until that clarity is there, it’s hard for companies to invest in a big way.”
As Garlinghouse noted, while he believes 2018 would see a wider institutional adoption of the technology, this does not appear to be happening any time soon largely due to lack of regulatory clarity.
When asked regarding his views on any potential collaboration with the Society for Worldwide Interbank Financial Telecommunication (SWIFT), Garlinghouse stated:
“The technologies that banks use today that SWIFT developed decades ago really hasn’t evolved or kept up with the market… SWIFT said not that long ago they didn’t see blockchain as a solution to correspondent banking. We’ve got well over 100 of their customers saying they disagree.”
On whether or not the platform could potentially supplant SWIFT in the future, Garlinghouse stated:
“Well, I think what we’re doing and executing on a day-by-day basis is, in fact, taking over SWIFT… Some of the largest SWIFT-enabled banks are now using Ripple technology.”
Citing a remittance firm as a real-world example, Garlinghouse claimed that Ripple’s system has managed to reduce the cost of cross-border payment charges from $20 to only $2, resulting in an “800% increase in usage overnight.”
As Garlinghouse concluded, among Ripple’s goals include supporting banks through the integration of their technology. Whether or not SWIFT will eventually adopt Ripple’s payment solutions remains to be seen.