Here’s Why Ripple (XRP) and Tokenized Settlement Remain in SWIFT Payment Game

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SWIFT has introduced a new initiative to upgrade cross-border retail payments for both consumers and small businesses.

Key aspects highlighted include faster confirmations, standardized fee structures, and a more transparent user experience. By emphasizing predictability and efficiency, SWIFT presents this program as a direct step toward modernizing international retail payments.

Vincent Van Code’s Response

However, he argued that these updates do not solve the underlying structural issues of the current system. In his view, SWIFT’s roadmap remains focused on messaging enhancements rather than on true settlement reform.

He stressed that capital remains tied up in the existing framework of nostro and vostro accounts, with liquidity inefficiencies left unaddressed. From his perspective, this is a critical weakness, as pre-funded accounts continue to trap funds across multiple corridors. He pointed to on-demand liquidity solutions as examples of how these inefficiencies can be eliminated rather than just managed.

Settlement and Liquidity Concerns

Van Code emphasized that while faster confirmations and transparency provide a smoother user experience, they do not constitute real-time settlement. The core issue, he argued, lies in how money actually moves across borders.

The reliance on correspondent banking chains means settlement delays persist regardless of messaging improvements. This, he said, makes SWIFT’s plan an incremental update to presentation rather than a fundamental redesign of how cross-border payments are settled.

Standards and Digital Assets

The software engineer also questioned the effectiveness of enhancements such as ISO 20022. While acknowledging that richer data formats can improve the transmission of information, he pointed out that additional data does not lower costs, remove friction, or mitigate counterparty risk. In his view, transparency in expected delivery times is a cosmetic improvement compared to achieving real-time settlement finality.

Van Code contrasted this with digital asset-based solutions, where settlement and liquidity challenges can be addressed directly through tokenized value transfer. He noted that SWIFT continues to treat digital assets and stablecoins as experimental, while platforms using blockchain-based settlement already operate in live corridors with measurable results.

Incrementalism vs. Structural Change

A central point in Van Code’s critique is that incremental change benefits incumbents who prefer to maintain existing infrastructure. By contrast, disruptive alternatives focus on eliminating inefficiencies rather than layering improvements onto legacy systems.

He argued that the choice the industry faces is between optimizing older infrastructure and building entirely new payment rails capable of addressing liquidity, cost, and settlement challenges at the root level.

SWIFT’s new program positions itself as a meaningful improvement for consumers and small businesses, aiming to provide more predictable and efficient international transfers.

However, Vincent Van Code’s analysis draws attention to the limits of this approach, pointing out that liquidity inefficiencies, delayed settlement, and reliance on legacy structures remain unresolved.

The contrast highlights two different paths forward for global payments: enhancing existing systems with incremental upgrades or pursuing structural solutions built on tokenized settlement models.

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