As Swift gears up for its annual Sibos jamboree in Geneva next week, the interbank messaging network is facing up to a growing threat from Ripple, which has signed up several major banks to a steering group on the use of distributed financial technology for global payments.
Bank of America Merrill Lynch, Santander, UniCredit, Standard Chartered, Westpac, and Royal Bank of Canada have joined as founding members of the Global Payments Steering Group (GPSG), which aims to use Ripple's technology to slash the time and cost of settlement while enabling new types of high-volume, low-value global transactions.
"The creation of GPSG is significant because this represents the first time that major banks have formulated policies to govern the transfer of money across borders using blockchain,” says Donald Donahue, former president of the DTCC, who has been named the GPSG chairman.
The group will oversee the creation and maintenance of Ripple payment transaction rules, formalised standards for activity using Ripple, and other actions to support the implementation of Ripple payment capabilities.
Julio Faura, head, R&D, Santander, says: "It’s time for banks to push on and move from discussing the potential benefits of blockchain, to making them a reality. As ever, the devil is in the details. We are joining the GPSG in order to contribute to the definition of the standards and processes which the industry now needs in order to move ahead and build better payments networks."
News of the steering group comes just days after Ripple won a ringing endorsement for its approach to using distributed ledger technologies to transform the cross-border payment business, scooping $55 million in funding and adding five new banks to its network.
With cash and member banks secured, Ripple is looking to push its advantage, potentially at the expense of Swift, which has been troubled in recent months by a series of cyberattacks on its members. The upstart has already introduced a multi-sign feature on its consensus ledger in a bid to prove its security credentials.