A common narrative in the XRP community is that XRapid will eventually replace SWIFT as a platform for cross-border payments in the banking sector. This is based on the superior technical capabilities of XRapid compared to SWIFT. One of its strengths is the part of instantaneous settlement of it. Unlike SWIFT, XRapid allows banks to settle transactions instantly using XRP. But even if all this looks great, it would be foolhardy to believe that it will be a quiet sail for XRapid that will go into the future. There are some points of view on the entire cross-border payment market that make things a little complicated for XRapid and could prolong the adoption process.
The geopolitical orientation to cross-border payments
There is a lot more in the cross-border payments market than just technical skills. The most important of these is the geopolitical angle. SWIFT, for example, is a tool of control, as can be seen in the case of Iran and other nations that are under sanctions. As a result, if banks in the Western world adopted a new system such as XRapid ripple, it should incorporate this aspect of geopolitical control. The possibilities of the United States and other Western powers that adopt a system that takes away this power from them is very minimal. But this creates an even bigger challenge.
Do nations that are trying to get away from US hegemony adopt XRapid as a tool for cross-border payments? There is a good chance that they will not do it and, for one important reason, ripple is an American company and controls a significant amount of all the XRPs in circulation. The chances of a country like Russia moving from an American controlled system to the next one are quite small. In fact, Russia has already developed its version of called SWIFT Financial message transfer system (SPFS) and is trying to integrate it with the financial systems of some of its allies like China, which already has its own system.
Competition is stronger than often presented
One of XRapid's biggest competitors is the blockchain world wire, which is based on stellar. Although often dismissed in the XRP circles, the blockchain world wire has a huge advantage, and this is the ability to settle instantly in both fiat and crypto. This is a huge strategic advantage, considering that regulations in most countries can not move fast enough, to allow for a massive shift to instant cryptography-based settlements.
This makes it easier for banks to adopt a technology that allows them to settle instantly while using existing currencies. This is an advantage for them as it allows them to settle transactions in an instant while, at the same time, they remain within the confines of existing laws. This does not mean that IBM maintains long-term business relationships with over 90% of the global banking sector, relationships that could distort the IBM side.
Possible future scenario
In the future, XRapid will increase, but it may not be the global scale that most XRP (XRP) investors expect. Most likely it will be part of a complex network of cross-border payment solutions that includes stellar, SWIFT, SPFS and others that are coming. Ultimately, a truly decentralized, unlicensed and apolitical network will likely unify all of them, in building the growth of a global currency.
This article is not FUD against XRP (XRP). It simply looks at technology in a more rooted vision, in the light of existing realities.