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SWIFT's chief Innovation Officer, Tom Zschach, has expressed his concerns regarding Ripple and its XRP as a settlement solution for international banks. In a LinkedIn post, Zschach wrote that institutions would rather have neutral, shared governance than infrastructure dominated by a competitor. He pointed out that resilience is less important than legal enforceability and industry-wide standards.
His words raised concerns about the role of XRP in the banking industry. According to Zschach, XRP is neither a deposit nor regulated money nor recorded on balance sheets. This makes it inappropriate in institutions that require finality and compliance in settlement processes. Analysts also claim that Ripple's control over 35% of the XRP supply is a cause of concern regarding centralization.
Ripple still markets XRP as a remedy to cross-border payment inefficiencies. The XRP Ledger will reduce the reliance on nostro and vostro accounts, which contain large volumes of idle liquidity worldwide. The On-Demand Liquidity service offered by Ripple and the RLUSD stablecoin are framed as solutions to reduce expenses and address compliance requirements.
The company claims that XRP's 24/7 availability and low transaction costs give it an edge over traditional rails. Automated Market Makers and an EVM sidechain are new features meant to appeal to developers and enhance their involvement in the network. Nevertheless, large institutions have not been involved in XRP adoption as much as their competitors.
Also Read: XRP Ledger Mentioned in Official BRICS Report: Here’s Why It Matters
Compared to Ethereum and Solana, XRP has lower metrics of decentralized finance. Statistics indicate that the XRP Ledger has $87.85 million locked, and the daily volume of the decentralized exchange is less than 70,000. Conversely, Ethereum has a TVL of $96.9 billion, and Solana has a TVL of $11.27 billion. The open interest in the future of XRP is also significantly lower than that of its rivals, which indicates low institutional participation.
The price action has mixed signals over the past few weeks. XRP has traded within a symmetrical triangle between 2.82 and 2.88 as large wallets accumulated close to 340 million tokens worth approximately 960 million dollars. Analysts are split, and expectations are between a breakout to $7-13 or additional falls due to institutional selling.
