SWIFT CEO Gottfried Leibbrandt and Ripple CEO Brad Garlinghouse, had a face-to-face discussion as a part of the 'Let’s Send the Money' panel at the Paris FinTech Forum 2019.
The cryptocurrency community has been waiting for a long time to witness the 'Face-Off' between the two CEOs of these giant companies, ever since Brad Garlinghouse stated that Ripple is in fact 'taking over swift'.
CNBCs moderator Elizabeth Schulze, started the conversation by asking Leibbrandt, why he thinks SWIFT is the future over Ripple.
'First, because we have 10,000 banks in the network, and that, I think, is a resilient system, correspondent banking, and the other reason is that we are innovating like crazy. The big innovation we introduced three years ago called GPI, Global Payments Innovation, which really takes correspondent banking into the 21st century.'
The SWIFT CEO pointed out that they now have more than half of the payments globally on that new platform. Most of those arrive within half an hour, end to end, customer to customer.
'We’ve signed up over 400 banks, all of the top 60 are on there, and we are looking towards general adoption in a year and half, and then the whole of correspondent banking will be on that new platform… and with that, you get all the benefits of the existing model, bak-centric, deep liquidity, with all the controls that banks have built around KYC, sanctions screening, and the whole of the compliance controls that go with it.'
Garlinghouse replied by saying that he compares the battle between both companies as similar to the one between Amazon and Walmart in 1997/1998, describing it as a 'David and Goliath' fight.
'Ripple talks a lot about what payments look like not just today but in 10-20 years, and when you think about that, we are talking about the Internet of Value: How do we move value the way information moves today. Ripple thinks about the Internet of Value: Really democratize payments, reducing costs dramatically, increasing speed dramatically.'
While Garlinghouse praised SWIFTS GPI payment system and recognized how it was a big achievement for traditional banking, he ultimately compared it to making a 'horse and buggy move faster than before instead of just buying a Ferrari'.
2/2 Ripple wants to offer Swift the automobile. Swift content with upgraded horse and buggy atm. Ripple CEO states were are 5-10 years out. Can't move the old white establishment as fast as they want.— Digital Asset Bastiat (@Crypto_Bastiat) January 31, 2019
Garlinghouse said that their intention is to reduce costs dramatically, increase speed and democratize payments. He went on to say that the future Ripple sees is one of 'many networks that are interoperable and that reduce the friction of payments to close to zero.'
Moderator Elizabeth Schulze asked Leibbrandt a question on why not to work with Ripple directly. The CEO of SWIFT explained that they’ve had a long discussion about this and that they’ve tried blockchain out with a big Proof-of-Concept.
'We had a long discussion about blockchain vs. API… Blockchain, we think is further out. We’ve run a big Proof-of-Concept with blockchain, several Proofs-of-Concept I should say, one of them to put it inside the reconciliation between banks, Nostro vostro. We had 40 banks participate in that. It was the largest HyperLedger implementation outside IBM. But when we evaluated it with the banks, they said ‘that works a proof-of-concept, but it is not clear to us that it is that much better than what we have today given the migration cost', he said.
He added that 'right now, banks aren’t incredibly comfortable with XRP due to volatility.'
Garlinghouse was quick to counter these claims, calling them full of misinformation.
'SWIFT today is a one-way messaging framework. It isn’t actually a liquidity provider… When we think about the internet of value, it’s a mixture of two-way messaging frameworks, coupled with real-time liquidity.'
'I hear people talking about volatility, and I feel they are propagating misinformation. If you take a low volatility asset [fiat] times a long duration vs. a high volatility asset [crypto] for a very short amount of time, it turns out that mathematically there is less risk in the XRP transaction than in the fiat transaction.'
CEO Gottfried Leibbrandt announced during the Paris Fintech Forum that Global services for financial payments provider SWIFT is set to partner with blockchain technology firm R3.
Brad Garlinghouse was part of the panel when the announcement was made.