Swift, the global financial messaging leader, has launched a revolutionary partnership with blockchain software company Consensys and over 30 top-tier banks to construct a shared ledger based on blockchain.
The project proposed at the Sibos event in Frankfurt seeks to put a distributed ledger into Swift’s infrastructure stack with an initial goal of 24/7 cross-border payments that are real-time.
The system will rely on a conceptual prototype, Swift co-developed with Consensys, and it will play an essential role in modernizing the payments landscape for global payments in the blockchain space.
Shared Ledger to Enable Real-Time
According to Swift, the new ledger will enable the secure transfer of tokenized value across borders in global markets, while using smart contracts to record, sequence, and validate each transaction.
By deploying blockchain protocol technology in conjunction with Swift’s existing compliance framework, it intends to offer more effective, faster settlements while ensuring regulatory compliance.
Importantly, the design is built on interoperability, assuring that existing financial systems and emerging blockchain infrastructures can all integrate seamlessly.
This would enhance the speed of any institutional market adoption of digital assets and address concerns about scalability and compliance.
Also Read: Russian Banking Giant T-Bank to Launch Blockchain Token Instruments
Global Banks Join Forces to Shape Implementation
Over 30 financial institutions, including large institutions such as Banco Santander, Bank of America, BNP Paribas, and HSBC, are working with Swift for feedback on ledger design and in supporting adoption later.
This group indicates many of the largest stakeholders in cross-border payments and underscores the importance of a group effort in building a system designed for global use.
Although Swift’s network presently services over 11,500 institutions globally, the engagement of banks in this effort shows that there is a broad industry interest in rebuilding financial infrastructure on a blockchain.
Also Read: DBS Unveils Token Services To Enhance Banking With Blockchain Technology
Consensys Collaboration and Blockchain Migration Plans
Although Swift did not reveal specifics about its partnership with Consensys, reports from the industry indicate that the financial network has been testing the possibility of moving sections of its infrastructure on-chain via Consensys’ Ethereum Layer 2 solution, Linea.
This collaboration demonstrates Swift’s desire to keep pace with the latest developments in the space and help secure its infrastructure for traditional payment rails and blockchain-based payments.
Swift CEO Javier Pérez-Tasso stated that the impetus of the project was to reimagine the payments experience by placing Swift’s trusted platform at the center of the industry’s digital transformation.
Also Read: Major UK Banks Join Forces With UK Finance To Explore Tokenized Sterling Deposit
Other Banks Embrace Blockchain as Industry Momentum Builds
Swift’s endorsement of blockchain comes on the heels of similar actions across the banking sector.
On March 25th, Custodia Bank and Vantage Bank launched America’s first regulated bank-issued stablecoin by putting deposits on a public blockchain to improve efficiency and compliance, UnoCrypto reported.
Days later, on March 28th, we reported that the French state-owned bank Bpifrance disclosed a €25 million crypto fund to make direct investments in blockchain tokens.
In a noteworthy development, UnoCrpto published a report stating that Eric Trump highlighted a sense of urgency by warning traditional banks may face “extinction in ten years” without adapting to accommodate blockchain innovations on April 30th.
All of these developments taken together illustrate that banks are racing to implement blockchain technology as they strive to remain relevant in an increasingly digital economy.
Also Read: Nine Big European Banks Get Ready To Back A Euro Stablecoin Under MiCA Guidelines