The SWIFT global cross-border payments system believes that the blockchain is not suitable for solving the problem of delay in cross-border bank payments. The main reasons are a violation of a number of regulatory requirements and the inability of the blockchain to ensure the confidentiality of such operations, which can lead to the reluctant adoption of this technology.
Ripple vs. SWIFT
Ripple and SWIFT have now become major competitors in cross-border payments. While SWIFT technology is considered slow, Ripple CEO Brad Garlinghouse is confident that his company’s blockchain technology can significantly speed up such payments.
Nevertheless, SWIFT is now seeking to promote GPI – its own new global payment system. It is reported that GPI has already accepted 450 banks, and that the daily estimated amount of payments is $300 billion. Now, according to the company, 80% of international payments are made using GPI. At the same time, GPI accounts for 50% of payments credited within 30 minutes, and 40% of payments credited in 5 minutes.
Fast, transparent and convenient GPI system
SWIFT says that the GPI system is not designed to accelerate payments, but it is quite fast. Citibank’s head of payments, Manish Kohli, noted that the GPI system has now significantly improved such aspects of payments as cost, speed, transparency, convenience and security.
In the GPI system, a bank sending money to a financial institution in another country can now fully track the movement of these funds. According to Kohli, it allows you to find out the cost of the commission charged by each bank, as well as solve problems if they arise.
Blockchain is not suitable for bank cross-border payments?
According to SWIFT, the blockchain is not at all what banks need.
In general, banks do not want their competitors to know how much money they are saving or sending, while the blockchain can disclose such data. In addition, regulatory requirements such as KYC (know-your-customer) are now set for blockchains (DLT), and banks will have to take care of this before sending blockchain payments.
Therefore, SWIFT says that blockchain companies cannot compete with its GPI system and achieve the same level of service.
Previously, SWIFT also announced that it intends to use the Corda technology of R3 to improve the level of customer service.