In today’s posting we will look at this YouTube video created by Cotswold Gent of SPQR Media. In the video Cotswold examines evidence linking CLS Group, which is the main provider of settlements for SWIFT, with the Federal Reserve and R3. R3 is a Ripple partner and currently using the XRP token as the first payment rail for its Corda Settler CorDapp.
SWIFT partners with CLS Group for settlements
In the video Cotswold highlights the fact that SWIFT claims to process the movement of $5.1 trillion a day for its customers (the banking industry). SWIFT’s main function is to act as a messaging service (payments) for banks, not to perform the actual movement of the funds (settlements). SWIFT contracts with CLS Group to perform a large portion of its $5.1 trillion per day in settlements.
When looking into the CLS Group’s product offerings we find their claim to provide settlement services that are being used by 70 of the world’s largest financial institutions with over 25,000 third-party-clients. They also claim to settle an average of $5 trillion per day, lining up nicely with the SWIFT figures to corroborate that CLS Group is the company performing the bulk of SWIFT’s daily settlements.
CLS Group launches DLT powered service
CLS Group has recently announced the launch of CLSNet a DLT powered payment netting service. Although SWIFT has in the past denied they are going to implement DLT technology themselves, it now appears their main provider of settlements, CLS Group, is in fact is integrating the technology into their product offerings.
The Federal Reserve Connection
Cotswold shows how CLS Group is operating as an Edge Act Corporation which places it under the regulation of the Federal Reserve Bank of New York. Since CLS Group performs a bulk of the $5.1 trillion per day settlements for SWIFT globally according to Cotswold this gives the Fed an unsettling amount of insight and power over the movement of money globally. CLS is performing settlements with banks across the globe such as Banco de Mexico, Bank of Canada, Bank of England etc.
According to Cotswold the CLS Group and the Federal Reserve are tied to Ripple through the financial stability oversight council. Which culminated in President Trump issuing executive order 13772 in an attempt to help push forward regulation to improve the payments industry. Cotswold notes Ryan Zagone, Ripple’s Director of Regulatory Relations, position on the faster payments task force steering committee.
The R3 and XRP connection
Cotswold then goes on to show a piece of news that CLS Group has invested $5 million in blockchain consortium R3, giving them financial ties to a Ripple partner. XRP is the first payment rail on the R3 Corda Settler CorDapp. Cotswold theorizes that CLSNet’s DLT is being powered by the XRP ledger, potentialy from R3, with regulatory clarity appearing to be the last hurdle hindering adoption.
The token taxonomy act is one of multiple pieces of legislation waiting in congress that attempts to address this clarity issue surrounding digital assets within the United States. U.S. regulatory clarity could go a long way towards propelling adoption and a potential bull run for both XRP and the wider digital asset market space overall. The question remains whether or not the U.S. will finally act or continue to fall behind other nations with regards to this emerging asset class.
Note: DigitalAssetInfo.net is not a financial adviser. All information is for entertainment purposes only and does not constitute financial advice.