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If XRP fully replaced SWIFT as the primary system for international financial transfers, its price could potentially rise massively.
XRP boasts impressive utility in the payment sector due to the attractive features of its underlying blockchain, the XRP Ledger (XRPL). Notably, as a result of this utility, several analysts believe XRP should be trading much higher than it does, raising discussions around price suppression.
XRP’s Potential
Consequently, market commentators suggest XRP’s potential could be unlocked if it witnesses an increase in adoption. Others have asserted that the token could eventually capture a chunk of the payment volume handled by SWIFT, a development that could help its price action.
SWIFT handles over $5 trillion in daily transactions, according to a report by the Financial Crimes Enforcement Network (FinCEN). This translates to around $1.25 quadrillion annually. Replacing even a small portion of this could dramatically increase XRP’s demand and market cap.
For XRP to replace SWIFT, it must secure broad adoption across global financial institutions. While the XRPL is faster and more cost-effective—processing transactions in 3 to 5 seconds at almost no cost—SWIFT has an established network of over 11,000 institutions and decades of trust.
SWIFT’s deep integration within the financial system makes it a strong competitor despite its slower transaction speeds and higher fees. Interestingly, payment giant Ripple has already secured some major partnerships which could leverage the XRPL, but it still has a long way to go in catching up to SWIFT’s extensive reach.
Hurdles XRP Must Overcome to Rival SWIFT
One of the most significant hurdles for XRP is gaining regulatory clarity, especially in the U.S. The legal battle with the Securities and Exchange Commission (SEC) has been a major stumbling block for its adoption.
However, as the lawsuit nears a close, if the absence of an appeal seals it completely, this could boost confidence in XRP and lead to broader acceptance by financial institutions.
Regarding scalability, SWIFT handles vast transaction volumes daily, and for XRP to compete, the XRPL must scale to process this volume reliably. The XRPL already allows quick settlement times, but operating at SWIFT’s scale might require upgrades in liquidity and infrastructure.
In terms of liquidity, XRP would need to maintain substantial liquidity in all major fiat currencies to facilitate seamless cross-border transactions. Ripple is addressing this through its On-Demand Liquidity (ODL) service, but much more would be needed to replace SWIFT.
XRP Price if Replaced SWIFT
If XRP handled 5-10% of SWIFT’s transaction volume, potentially amounting to $125 trillion, its market cap would need to rise massively. Some estimates place this market valuation at a reasonable figure of $10 trillion, much more than the broader crypto market cap.
A market cap of $10 trillion could push the price of XRP into the hundreds of dollars, considering the circulating supply of 100 billion tokens. Such a figure would lead to an XRP price of $100. Interestingly, if XRP fully replaced SWIFT, prices could reach the ambitious $1,000 level.
However, there are significant challenges. Financial institutions must trust XRP as a secure and stable alternative to SWIFT. Cryptocurrencies’ inherent volatility also poses a risk, as institutions would need a stable asset for everyday transactions.