Ripple has finally concluded its legal dispute with the U.S. Securities and Exchange Commission (SEC), bringing legal clarity to its underlying cryptocurrency, XRP. Now, observers are beginning to focus on whether XRP can become a viable alternative to SWIFT.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has been the core system for international money transfers since its establishment in 1973. However, in recent years, critics have pointed out that the system has become outdated.

Many within the blockchain industry, including Ripple CEO Brad Garlinghouse, believe that blockchain technology offers higher throughput and better transparency, making it a superior alternative to SWIFT.

Now that Ripple's legal disputes have come to a close, can it provide a reasonable alternative to SWIFT?

Over fifty years ago, SWIFT replaced Telex and became the global financial transaction coding system. The system itself does not directly transfer funds but provides standardized codes and a secure messaging platform for banks to coordinate money transfers.

When a customer initiates a transfer request, their bank sends the request to the receiving bank, which may pass through several other banks in the network. Actual settlement is completed through existing banking relationships and clearing systems.

SWIFT processes over 53 million messages daily across 40,000 payment routes, covering 220 countries and more than 11,500 institutions.

However, SWIFT also has significant issues. Transactions can take days, and fees are high. Additionally, the complex network of banking collaborations makes it difficult to ensure information transparency.

According to SWIFT, as of January 2024, one in ten transactions fails, and one in twenty experiences delayed settlement.

Since its inception, the network has undergone multiple upgrades, including the ISO 20022 standard, aimed at providing clearer payment data and greater transparency by November 25, 2025. However, critics argue that it remains a "legacy" system fundamentally running on XML technology from decades ago.

SWIFT has the advantages of ubiquity and clear institutional adoption, while Ripple has significant technical advantages, including faster transaction and settlement speeds and lower costs.

In 2018, shortly before the years-long legal dispute between Ripple and the SEC began, Garlinghouse stated in an interview with Bloomberg, "Our actual work every day is to replace SWIFT," as banks and remittance companies had already begun adopting the XRP ledger.

So, in the context of institutional partners joining in and the significant rise in XRP's price over the past year, what is hindering the Ripple ledger from challenging SWIFT?

Cassie Craddock, Managing Director for Ripple UK and Europe, stated in an interview with Cointelegraph, "We don't see blockchain as an opportunity to replace traditional payment rails, but rather as a means to enhance and modernize existing financial infrastructure, creating opportunities for greater efficiency and interoperability."

However, "to reach the scale of traditional service providers, two key challenges need to be addressed: usability and compliance."

On the compliance front, Ripple was recently embroiled in a high-profile legal case.

In December 2020, the SEC, led by Chairman Jay Clayton, sued Ripple Labs, accusing it of failing to register XRP as a security under U.S. law. According to the commission, the company and its executives raised funds through unregistered securities sales. This led to a costly, years-long legal battle.

In 2023, Judge Analisa Torres ruled that XRP's programmatic sales do not require securities registration, but sales to institutional investors do. The court ultimately imposed a $125 million civil penalty on Ripple in August 2024.

By October, Ripple and the SEC had both filed appeals, but with the election of President Trump and the SEC's shift in priorities regarding cryptocurrencies, both parties eventually agreed to dismiss the lawsuit in early August 2025.

This case may have affected XRP's adoption in the U.S., but during the case, Ripple signed partnership agreements with institutions in multiple jurisdictions worldwide. Additionally, the case provided XRP with unique legal clarity—something most cryptocurrencies struggle to achieve.

However, legal clarity may not be enough for Ripple to surpass the world's largest payment network, as banks themselves must be willing to change their operating models.

Vincent Van Code, a pseudonymous software engineer and blockchain advocate, stated that adopting SWIFT's platform "handles billions of dollars daily, but the system is rigid, costly, and highly isolated. Replacing the core system could take 5 to 7 years and cost hundreds of millions—this is a significant operational risk."

He pointed out that banks are reluctant to change systems because "every bank 'understands SWIFT,' making it the safest and most economical choice. Even initiatives like SWIFT GPI are merely patches to a nearly 50-year-old foundational system."

According to Van Code, Ripple must contend with fragile legacy core systems and "uneven" global regulations while reassuring risk-averse banks—while also overcoming external doubts about the liquidity of its underlying token.

"SWIFT's ubiquity is its moat, and breaking this network effect takes time."

Craddock noted that "institutions need familiar tools," and the newly introduced regulations, especially the GENIUS Act, represent "a step toward clear rules that give institutions confidence to adopt blockchain in a compliant manner."

"Stablecoins like Ripple USD are helping bridge this gap—they're easy to understand, pegged 1:1 to the dollar, and behave like cash in digital form. This familiarity is why we see traditional financial institutions increasingly willing to adopt cryptocurrencies and blockchain technology."

It remains unclear whether Ripple can truly challenge SWIFT in the future, breaking the entrenched business practices of the banking industry and the regulatory body's lack of enthusiasm.

However, cryptocurrencies are rising in the U.S., and lawmakers are creating space for digital assets to play a key role in the traditional financial system. The U.S. Congress has explicitly expressed a preference for the expansion of private stablecoins rather than a digital dollar or central bank digital currency (CBDC).

Congress has not directly prohibited CBDCs, but through legislation, it has stipulated that only legislative bodies can create CBDCs, excluding the Federal Reserve and commercial entities from this authority. Meanwhile, Congress has passed the GENIUS Act, establishing clear rules for stablecoin issuers.

In March of this year, after the SEC withdrew its investigation into Ripple, Garlinghouse stated in an interview with Fox News, "The market opportunity in the U.S. is enormous," and mentioned the chance to modernize the payment system away from SWIFT.

"The Trump effect is very significant… you will see this influence in the adoption of these [blockchain] technologies."

Related: U.S. Congress requests the Treasury to report on strategic Bitcoin (BTC) reserve details

Original article: “Ripple's Legal Battle with the SEC Ends: Is It Time to Challenge SWIFT?”

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