This SWIFT History Will Change the Way You Think about Ripple and XRP

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A detailed thread shared by Pumpius, a well-followed voice in the XRP community, focused on the origins of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) and its relevance when compared to RippleNet and XRP.

This development established a new structure for cross-border financial institutions, but the framework was anchored in the trans-Atlantic financial bloc.

According to Pumpius, oversight was built into the system from its inception, as SWIFT is incorporated in Belgium and falls under the jurisdiction of the National Bank of Belgium, with additional supervision from the central banks of the G-10 countries.

This gave advanced economies a structured role in SWIFT’s governance. Shareholders elect their 25-member board of directors through National Member Groups, where voting rights are proportional to message volume, a model that has historically favored large Western banks.

Messaging Without Settlement

Pumpius emphasized that SWIFT does not move money but instead transmits instructions between institutions, which still rely on correspondent banking chains. This structure requires banks to maintain pre-funded nostro and vostro accounts across multiple jurisdictions, leading to settlement delays, opaque fees, and inefficiencies. The lack of real-time settlement remains a significant limitation.

The use of SWIFT as a political instrument was also highlighted. In 2012, SWIFT disconnected Iranian banks following European Union sanctions, a move that aligned with U.S. Treasury objectives.

More recently, in response to Russia’s 2022 invasion of Ukraine, Russian banks were removed from the SWIFT network, further confirming how governance and jurisdiction can be leveraged for geopolitical purposes. Pumpius argued that this reliance on bloc politics demonstrated that SWIFT’s neutrality has been overstated.

RippleNet and the XRP Ledger

In contrast to SWIFT’s model, Pumpius explained that RippleNet and its On-Demand Liquidity (ODL) system use XRP to facilitate settlement across currencies without the need for pre-funded accounts.

RippleNet shares a single API that handles messaging, clearing, and settlement in real time. By leveraging XRP as a bridge asset, institutions can complete transactions within seconds, rather than days, eliminating the reliance on correspondent banking chains.

Pumpius described the XRP Ledger (XRPL) as a decentralized and public blockchain designed for neutrality by architecture. XRP serves as its native asset, enabling transparent and auditable settlement that is non-location specific. According to the Pundit, this structure removes the concentration of influence held by Western authorities within SWIFT’s governance model.

The Road Ahead

SWIFT is currently migrating to the ISO 20022 messaging standard, with its initial implementation taking effect in March 2023 and full decommissioning of legacy MT messages expected by the end of 2025. Pumpius noted that this process represents a slow and incremental upgrade of decades-old infrastructure, highlighting the challenges of adapting legacy systems to modern requirements.

Meanwhile, RippleNet and the XRP Ledger offer what Pumpius described as an “end-state” solution for global financial settlement. As the demand for faster, auditable, and geopolitically neutral payment infrastructure grows, he argued that RippleNet and XRP provide a framework that reduces reliance on political chokepoints and offers efficiency beyond messaging alone.

In his closing remarks, Pumpius positioned RippleNet and XRP not as alternatives to SWIFT, but as fundamentally different systems designed for real-time value movement. This distinction, he suggested, becomes increasingly important as financial institutions explore tokenized liquidity and settlement technologies in response to ongoing fragmentation in global payment routes.

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