[Token] “Fees Cut by Up to 90%” Ripple Bets on Cross-Border Payments, Targets SWIFT’s Weaknesses but Replacement Remains Unclear

Ripple Acquires Gtreasury to Upgrade Cross-Border Payments
Targeting SWIFT’s Limits, a “Gradual Convergence” Looks More Likely Than a Full Replacement
Low-Volatility Stablecoins Could Still Threaten XRP’s Position

Ripple has acquired GTreasury, a provider of global treasury management systems (TMS), and rolled out a new payments solution. Built on blockchain technology, the move aims to speed up cross-border payment processing, sharply reduce remittance fees, and challenge the existing SWIFT-centered global payments system. Still, many in the market believe it will be difficult for Ripple’s network to replace SWIFT in the near term.

Ripple: Cross-Border Payments Can Get Cheaper and Faster

On December 17 (local time), crypto outlets including CoinDesk and U.Today reported that Reece Merrick, Ripple’s managing director for the Middle East and Africa, strongly criticized traditional bank payment systems as “still painfully inefficient.” Recalling his experience working in banking, Merrick said customers’ payment requests are routed through numerous intermediary banks, creating unnecessary delays. He also argued that the current system is opaque and unpredictable—often leaving customers unsure when funds will arrive—and that this uncertainty causes significant stress.

Merrick said Ripple invested $1 billion to acquire GTreasury and introduced a new payments solution built on the XRP Ledger to address these issues at the root. Through the acquisition, he said, Ripple can tackle liquidity constraints and slow settlement, while cutting cross-border payment costs by 60% to 90% versus existing methods. Given that XRP’s transfer fees have already been notably cheaper than those of Bitcoin or Ethereum, he framed the move as a significant step.

He added that while traditional banking systems typically take two to three days to process remittances, GTreasury—using blockchain technology—can complete payments in just seconds. Ripple said it plans to use GTreasury to upgrade outdated cross-border payment infrastructure and expand its footprint in global markets.

Challenging the SWIFT-Centered Payments System

Ripple’s push to upgrade global payment infrastructure is widely seen as stemming from its ambition to replace the SWIFT system. Ripple has long taken direct aim at what it calls an outdated, SWIFT-centered payments framework. In May, it wrote on its official blog that “traditional cross-border payment systems still rely heavily on manual processes, leading to errors, delays, and excessive fees,” and publicly argued that its Ripple Payments solution—built on XRP and RLUSD (Ripple’s proprietary stablecoin)—could serve as an alternative.

Indeed, Ripple is often credited with addressing the structural flaws of the existing SWIFT-based system. Today’s cross-border transfers depend on nostro accounts, under which banks pre-fund foreign currency deposits at overseas financial institutions. When a customer initiates a transfer, the domestic bank sends the payment information via the SWIFT network, and the receiving bank releases the funds after verifying the SWIFT message. By contrast, Ripple’s payment network uses on-demand liquidity (ODL): when a transfer is requested, the sending bank automatically purchases and transmits XRP for the required amount, and the receiving bank immediately converts it into local fiat currency. This allows liquidity to be sourced instantly at the time of transfer, without maintaining pre-funded foreign accounts.

That said, it is difficult to conclude that Ripple holds an unassailable competitive edge. SWIFT itself is accelerating the adoption of blockchain technology. Since 2016, SWIFT has steadily developed a blockchain partnership with Chainlink, a provider of blockchain oracle services. In September 2022, the two unveiled an initial proof of concept (PoC) using Chainlink’s Cross-Chain Interoperability Protocol (CCIP), followed in August 2023 by a successful CCIP-based PoC test conducted with major financial institutions including ANZ, BNP Paribas, BNY Mellon, and Citibank. Chainlink and SWIFT are now reportedly running a pilot project that allows banks to execute on-chain transactions using their existing infrastructure, integrating SWIFT messaging with Chainlink’s execution layer, the Chainlink Runtime Environment (CRE), so banks can access blockchains through the existing SWIFT network.

Some analysts even suggest that SWIFT and Ripple could ultimately move into a cooperative relationship. If ODL’s tangible benefits in cost reduction and speed improvement are proven, a gradual transition or parallel use within the global payments system could follow. One market participant said that as Ripple expands the application of its remittance solutions through partnerships with traditional financial institutions, competition between SWIFT and Ripple may evolve not as a zero-sum game but as a form of gradual convergence. Such a hybrid model, the source added, could serve as a practical bridge in the transition of international payment systems and represent a more realistic alternative given regulatory differences and structural gaps in financial infrastructure across countries.

Limitations Facing Ripple and XRP

Ripple also faces clear hurdles it must overcome. Its remittance system runs on the Ripple Protocol Consensus Algorithm (RPCA), which operates through a model known as “federated consensus.” When a change occurs on the blockchain, it is automatically recorded and then put to a vote to determine its validity. Ripple relies on a group known as validators, which review the validity of new transactions. If more than 80% of validators agree, the transaction is finalized on the blockchain.

The issue is that this structure risks distancing Ripple from the core value of decentralization compared with other cryptocurrencies. Faster consensus reduces the scope for broader participation in the blockchain. In its early days, Ripple was also criticized for effectively controlling the network by directly operating most validators. In response, the company has spent years working to diversify validators. Today, more than 150 independent validators worldwide—run by universities, exchanges, companies, and individuals—participate in the network. Even so, many in the industry argue that validator incentives remain insufficient and that further measures are needed.

Another concern is that XRP, the backbone of Ripple’s payments system, could see its position challenged by stablecoins. In an August report, South Korea–based brokerage iM Securities said the stablecoin market has been expanding rapidly to around $270 billion as a crypto-friendly “Trump 2.0” administration takes shape. It noted that about 98% of stablecoins are dollar-pegged, with usage split across DeFi and trading (67%), cross-border remittances (15%), inflation hedging (10%), goods and services payments (5%), and other purposes (3%). The report added that while stablecoins carry limited price volatility because they are pegged one-to-one to fiat currencies, XRP—like Bitcoin and Ethereum—faces price fluctuations driven by market supply and demand. As a result, it argued, XRP cannot be considered fully suitable for international remittances, and stablecoins could potentially replace XRP’s role as a bridge currency for cross-border payments.