$XRP fell 2.2% over 24 hours after rising 49.4% over seven days, returning the token to negative territory after a week of gains.
The drop comes as crypto traders watch changes in the payment business related to $XRP as major banks continue to implement blockchain systems aimed directly at solving the prefunding problem. JPMorgan Chase (NYSE: JPM) is doing this through Kinexys.
In June, JPMorgan expanded its blockchain top-up capabilities to eight currencies: USD, EUR, GBP, AUD, HKD, JPY, RMB, and SGD. Customers can move these funds around the clock and exchange the supported currencies on-chain.
A company holding dollars can receive yen without first purchasing a separate crypto asset to facilitate the transaction. JPMorgan can set the foreign exchange rate, execute the swap, and record the settlement on its blockchain immediately.
Citigroup's (NYSE: C) US dollar clearing network, which operates 24/7, serves over 250 banks across more than 40 markets. Citi Token Services also transfers tokenized commercial bank deposits using blockchain infrastructure. Citi states that combining both systems allows institutions to make cross-border payments swiftly while requiring less funds to be pre-positioned.
Real-Time Liquidity Sharing technology also enables processing payments without banks prefunding each account. Ninety seconds is still slower than the $XRP Ledger's settlement range of three to five seconds. But for companies, it may be more important to use cash already held at a regulated bank than to route payments through $XRP.
SWIFT links separate bank tokens, eliminating the need for a common cryptocurrency
Banks faced another issue, as their digital deposits were not interconnected. This meant that if you held a one-dollar token for HSBC Holdings (NYSE: HSBC), it was an obligation of HSBC. Similarly, a token for a deposit at Standard Chartered (LSE: STAN) was confined to the Standard Chartered ecosystem.
SWIFT is addressing this problem. On August 19, HSBC and Standard Chartered banks completed the first cross-border transaction via SWIFT's blockchain ledger. The banks kept their deposit tokens in their own infrastructure. SWIFT delivered messages, matched obligations, compared them, and calculated payments for each bank. The final transfer was settled through traditional payment systems.
SWIFT did not recreate the $XRP model. Indeed, a cryptocurrency can serve as a bridge asset on its own ledger. However, SWIFT implemented an alternative approach, using different tokens issued by banks that can interoperate, even when on different platforms.
The project extends beyond the initial pair of banks. SWIFT states that 17 banks across six continents are preparing to conduct real transactions for tokenized deposits via this ledger. HSBC already offers its tokenized deposit service in six markets and supports CNH, HKD, SGD, EUR, GBP, USD, and AED.
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