Top officials of The Society for Worldwide Interbank Financial Telecommunication (SWIFT) have moved to criticize cryptocurrencies and blockchain payment systems while describing cryptos as “useless and unstable.”
According to an FXstreet report today, the anonymous representatives of the inter-bank payments network provider made this known at a breakfast briefing in London yesterday, while adding that cryptos cannot be compared to fiat currencies because of the high volatility associated with cryptocurrencies.
“They [cryptocurrencies] go down in value like a yoyo; they’re useless and unstable. And even if crypto companies do make it stable, it’s still a basket of currencies,” they added.
Despite the volatility nature of cryptocurrencies, the SWIFT official did not fail to recognize the proposed Facebook Libra as one digital currency that has the potential to affect payments in the short run.
Their fear could be understood because Facebook would most likely integrate the Libra crypto into other social media platforms owned by the company, including Whatsapp, Messenger, and Instagram, which boast a combined 2.7 billion users each month.
However, the officials did not fail to acknowledge SWIFT’s deficiency in cross-border settlements.
At the moment, the SWIFT’s payment network provides messaging capabilities as well as facilitates financial settlement for about 11,000 banks and financial institutions globally.
Even though the SWIFT’s financial network has helped these financial institutions process millions of payments in the past, the system is still faced with significant constraints, including cost and time factors.
“If you want to send a payment [with SWIFT] from Australia to China after midday, you instantly have a 12-hour delay because of opening hours,” the officials added.
Again, the SWIFT officials do not consider other competitors that utilize the blockchain technology in settlements like Ripple’s xRapid solutions, which features instant payment at a relatively cheaper transaction fee as a threat to traditional payment solutions.