The Ripple Transaction Protocol - Analysis of a Possible Evolution of the Banking System

Abstract

The blockchain technology and most of the cryptocurrencies were born with the idea of being disruptive toward the current banking system. They proposed themselves as a decentralized system that could ideally replace banks and fiat currencies. There are many reason for which this utopian view of a future with no banks cannot happen, at least in the near future. Nevertheless, the technology could help the evolution of our financial system if properly implemented. Ripple was developed from the blockchain technology but, contrarily to other cryptocurrencies, it was created to be used by banks and implemented by all financial institutions to enable fast, free and secure financial communications. It does not want to replace the banking system but help it evolve and become more efficient. The main idea of this work is to develop a research and a forecast of the socio-economic impact that would be registered if the technology proposed by Ripple (as representative of the blockchain technology) would be adopted by banks and financial institutions and replace the actual SWIFT system in the international finance context. The aim is an analysis of a concrete proposal of an evolved financial system that is much more interconnected, faster, more efficient and more secure.