The Society for Worldwide Interbank Financial Telecommunications, SWIFT, recently had some harsh words for crypto. Specifically, representatives from SWIFT have reportedly said that crypto is “useless and unstable”. Nonetheless, this comes as crypto is increasingly challenging SWIFT’s dominance on monetary transfers.
SWIFT calls crypto “useless”
This news was first covered in an FXStreet report on September 10th. This piece refers to some SWIFT representatives, who wish to remain anonymous, who criticize cryptocurrencies. The representatives raised cryptocurrencies’ value fluctuations as one of their main problem.
“They 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.”
This comment reveals a blatant misunderstanding of the merits of crypto. Furthermore, value fluctuations become largely irrelevant when using crypto to transfer large sums of money in a short period of time. In addition to this, some “stablecoins”, such as Tether, follows the US dollar.
However, this report from FXStreet reveals that SWIFT has felt the consequences of crypto’s emergence. The main reason for people’s dissatisfaction with SWIFT is the long payment processing times. Furthermore, the SWFT network is also quite costly.
Although the SWIFT network is the international standard for making payments, connecting around 11,000 banks and financial institutions, it has several fundamental problems. The SWIFT representatives even admitted as much, stating:
“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.”
SWIFT recognizes Libra could be a “short-run threat”
It is clear that the SWIFT representatives still largely disregard crypto, even though it has been shown countless times that crypto is far quicker and cheaper than SWIFT transfers.
Nonetheless, the report does reveal that SWIFT recognizes that Facebook’s Libra crypto could pose a threat. Libra will be integrated into Facebook’s three main applications, namely Instagram, WhatsApp and Messenger.
As such, Libra will have a potential reach of around 2.7 billion users every month. However, SWIFT reportedly only views Libra as posing a threat in “the short term”. It appears that, at least these SWIFT representatives, do not regard crypto as a serious competitor.
That could soon change, however. An increasing number of large financial institutions are looking to cryptocurrencies and blockchain-based payments to quickly transfer large sums of money. Just last week saw a massive unidentified Bitcoin payment of over one billion.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.