Cory Johnson, the Chief Market Strategist for Ripple, recently appeared on a webinar to speak about XRP and its use-case in disrupting cross-border payments. He also offered his opinions on the existing system SWIFT, also known as the Society for Worldwide Interbank Financial Telecommunication. Cory also elaborated upon his feelings towards rival blockchains..
He began by talking about XRP’s strengths, stating that those lay within technologically recording value and “moving it across borders”. These are moving through a digital distance while being a digital representation of money which utilizes blockchain.
According to Johnson, the blockchain ensures that XRP’s transactions are real and to ensure maximum security. He further stated:
“The World Bank said that the average cost of remittance was an all-time historical or low for humanity at 6.94%. The average business has a net profit margin of about 7% but the cost of moving money across borders is about 7%. That means the average business has no business in being global.”
Moreover, the existing system also has an error rate of 6% in its transactions, stated Johnson, likening it to losing power one hour in a day. The 700 basis point cost that comes with the system and the three to five days it takes for a transaction does not fit with the era we live in, he said.
This is the latest in a series of statements made by Ripple’s executives regarding the incumbent system, which is currently undergoing an overhaul. The makeover, known as SWIFT Global Payments Initiative, is set to cut costs and increase speeds in an attempt to stay relevant.
Brad Garlinghouse, the CEO of Ripple, has likened the upgrade to putting a Ferrari shell on a Ford Model-T, stating:
“Swift GPI is like putting a Ferrari shell on a Model-T engine. It’s a cosmetic upgrade on old infrastructure: messaging is still not tied to settlement, it’s unidirectional and can’t solve for liquidity.”