XRP Price May Rise to Greater Heights
If the asset merely supplements SWIFT by processing 1% of the daily volume of the global messaging network.
Discussion Surrounding XRP’s Potential Role in Global Payments
Particularly in relation to SWIFT, which is the primary financial messaging network that has recently dominated the cryptocurrency space.
Can XRP Supplement SWIFT?
Several industry experts, including executives from Ripple, have discussed how XRP and the XRP Ledger (XRPL) could either supplement or replace SWIFT in cross-border transactions.
For instance, Ripple’s CEO Brad Garlinghouse emphasized at the 2019 Paris Fintech Forum that the goal is not necessarily to eliminate SWIFT, but to enhance its efficiency. He acknowledged that SWIFT’s Global Payments Innovation (GPI) is a step in the right direction, but pointed out that solutions based on the Ripple blockchain are more effective.
Additionally, in a discussion at Money20/20 USA in 2018, Ripple CTO David Schwartz highlighted how XRP’s functionality reduces reliance on intermediaries. He underscored the inefficiencies of traditional payments, which are often slow and costly. Various analysts have shared similar viewpoints alongside Ripple executives.
Rapid Large-Scale Transaction Volume
For context, the SWIFT network currently processes a substantial volume of transactions daily. As of December 2022, the system averaged 44.8 million FIN messages per day, marking a 6.6% increase compared to the previous year.
Although SWIFT has not publicly disclosed the total monetary value of these transactions, historical estimates suggest that the daily amounts are considerable. In 2004, SWIFT processed about 10 million messages per day, with an average transaction value of approximately $500,000, totaling around $5 billion daily.
Uncertainty Around XRP’s Market Valuation
Despite discussions around XRP’s potential to supplement SWIFT, it remains uncertain how this would affect its market valuation. To gain some insights, we used the AI chatbot ChatGPT to analyze a hypothetical scenario where XRP processes 1% of SWIFT’s daily transaction volume.
XRP Price if Processing 1% of SWIFT’s Daily Volume
According to the chatbot’s predictions, if XRP facilitates 1% of SWIFT’s estimated daily $5 trillion, this would translate to processing $50 billion in daily transactions. To estimate the potential price impact, it utilized a proportional method, comparing existing market data with the hypothetical scenario.
At the time of analysis, XRP was trading at $2.08, with a daily trading volume of $2.9 billion. In the hypothetical scenario, XRP’s daily trading volume increases to $50 billion, resulting in a volume increase factor of approximately 17.24 times its current level.
XRP Price if Processing SWIFT’s Volume | ChatGPT
Subsequently, ChatGPT assumed a direct correlation between price and trading volume, estimating that in this scenario, XRP’s price would be approximately $35.86. Notably, this would represent a 1,624% increase from XRP’s current price, resulting in a market capitalization exceeding $2 trillion.
However, it is important to note that evaluating such assumptions is a significant oversimplification. In reality, an increase in trading volume may not lead to a proportionate rise in price, as selling pressure would largely come from selling pressure.
