Here is the Chapter in The Blockchain Economy digital book on Real Time Settlement, updated with this post. 

Until recently, there were 2 horses in the race for Real Time Settlement of Cross Border FX:

• Swift using DLT. SWIFT could do this easily at a technical level (any of the permissioned Blockchain systems will work) and as they are owned by the banks, they will get through the right doors.  This is SWIFT’s game to lose.

• Ripple XRP. Never underestimate the ability of legacy bureaucracy to snatch defeat from the jaws of victory; so SWIFT may blow it and hand victory to a brash upstart like Ripple XRP which is publicly fighting SWIFT for banker’s attention. However, there are serious questions about a) whether a speculative coin like XRP is useful addition to a messaging system (Ripple ILP) and b) whether a speculative coin like XRP could be classified as a Security by regulators. 

Now JPM Coin is the third horse in the race that will take business away from both the other players:

• Swift will lose volume as big banks emulate JPM and settle using their own Coin. Expect something like CitiCoin, GoldmanCoin, HSBCCoin, DeutscheCoin, etc to announce soon.  They may choose a) different branding b) different base currencies (eg EUR), but this is low hanging fruit for the Big Global Banks.

• Ripple XRP will be forced to pitch for smaller banks (who will tend towards loyalty to SWIFT) as the Big Global Banks go for their own Coins.

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Bernard Lunn is a Fintech deal-maker, investor, entrepreneur and advisor. He is the author of The Blockchain Economy and CEO of Daily Fintech.

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