XRP Surges as Rumors of SWIFT Partnership Heat up
XRP surged 12% yesterday as news broke about a potential partnership between Ripple and banking consortium R3. Some XRP bulls believe that the partnership could eventually lead to SWIFT integrating XRP.
However, the community can’t quite decide on what is going on. XRP sank 4% today after investors suddenly turned pessimistic as it looks like SWIFT will choose R3’s own settler technology over Ripple’s XRP.
Here’s where the confusion emerges:
- SWIFT has chosen to integrate with R3, a different blockchain company than Ripple
- Ripple is disappointed that SWIFT isn’t integrating a Ripple technology
- However, the R3 blockchain technology that SWIFT is integrating relies on XRP, so Ripple and XRP are benefiting anyway
SWIFT is a global messaging system to settle cross-border payments. On January 30, the company announced that it would link R3’s open source blockchain solution at a proof of concept stage.
“Later today we are announcing integration with R3,” explained SWIFT CEO Gottfried Leibbrandt during the Paris Fintech Forum. Liebbrandt also explained that the trial would see the interaction of SWIFT’s payments standard framework dubbed as Global Payments Innovation, or GPI, with R3’s trade finance platform.
R3’s settler technology uses blockchain to facilitate smoother, cheaper transactions between banks.
“We are announcing later today a proof-of-concept with the R3 blockchain on trades where you can initiate a payment on the trading platform, and then it goes into GPI,” Leibbrandt revealed in a statement to CNBC on Wednesday. “We’re exploring interconnectivity with a lot of things and banks have always been a part of that interconnectivity.”
Based on those statements, SWIFT is fully planning to ignore Ripple. SWIFT plans to use R3’s blockchain technology while distancing itself from Ripple and XRP.
This is where things get confusing: in November 2018, news broke online that SWIFT was considering a partnership with Ripple. SWIFT was exploring the use of Ripple’s blockchain technology and XRP to facilitate international bank communication and transactions. SWIFT denied the rumor at the time. Based on the news from this past week, it appears the rumor was not true at all, as SWIFT is not partnering with Ripple.
So why is XRP surging despite the fact that SWIFT isn’t partnering with Ripple? Well, R3’s blockchain-based settlement platform uses XRP.
R3’s Corda Settler uses Ripple’s XRP tokens to settle transactions. That means Ripple could still benefit from SWIFT’s integration with XRP – despite the fact that SWIFT isn’t partnering directly with Ripple.
SWIFT currently has over 11,000 financial institutions in its network across 200 countries, including banks, brokerages, mutual fund firms, and securities dealers.
All Lawsuits Between R3 and Ripple Have Been Settled
Some members of the crypto community seem to believe there’s some controversy between R3 and Ripple. It’s somewhat true: the two blockchain startups both filed suits over a contract dispute. The dispute went public back in 2017.
R3 claimed that Ripple was not honoring an agreement that included an option for R3 to purchase 5 billion XRP. The deal would have allowed R3 to purchase XRP at a price of $0.0085 per token at any time before September 2019. That’s a huge deal because XRP has sat between $0.25 and $0.60 for the past few months.
Ripple filed a counter case alleging that R3 had not stuck to its end of the contract. Ripple claimed that R3 had failed to disclose that certain R3 consortium members were preparing to leave the group.
“Blockchain startups Ripple and R3 have resolved a legal battle that saw both firms filing suits over a contract dispute.”
Coindesk also posted an email sent to them from a representative of R3 stating:
“R3 HoldCo LLC, R3 LLC, Ripple Labs Inc. and XRP II, LLC announce that they have reached a settlement of all outstanding litigation between the parties. The terms of the agreement will remain confidential and both sides look forward to putting these disputes behind them.”
The case between Ripple and R3 is settled. Despite that fact, one person by the name of ‘Bitcoin Cultist' on Twitter claims that the issue between the companies is an ongoing dumpster fire:
“Literally, the banks said they will use the settler over XRP. The complete opposite of market opinion. I love that Ripple filed lawsuit against R3 because their business model is over!”
That analyst was quickly reminded that the lawsuit between Ripple and R3 was settled months ago. In response, however, the user doubled down on his view:
“You keep saying that but the latest crypto news says otherwise. Perhaps you can be a journalist.”
The user was then linked to the company’s official statement claiming that the case was settled, at which point the user stopped replying.
SWIFT is Moving Ahead with R3 and XRP Integration
In any case, SWIFT is moving ahead with its plans to integrate R3’s Corda Settler technology. While SWIFT isn’t technically partnering with Ripple, they are indirectly supporting XRP because Corda Settler uses XRP – so Ripple will benefit regardless. We’ll keep you posted as this whole story continues to shake out.
You can see the original tweet that started the XRP Army to come out in force:
You are a bank. What would you choose to settle payments?@galgitron @XRPTrump @haydentiff @MikeNardolillo @HammerToe @Hodor @Mr_HvD @rootvegetable3 @digitalassetbuy @LordVaderXRP @NordicAnn @LeoHadjiloizou @BankXRP @XrpCenter @YassinMobarak @XrpYoda #xrpcommunity #XRP
— Лях Артем⚡️XRPARMY 🦜 (@Prosatan666) January 30, 2019