Key Takeaways
- SWIFT reveals plans to launch a multi-ledger payment network.
- The payment giant outlined its CBDC and tokenization integration plans for the future,
- Traditional banks will have access to private and public blockchains through SWIFT’s decentralized payment network.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT), a key player in cross-border payments, has announced plans to bridge the gap between traditional banking and digital assets.
In a Sept. 11 blog post, the firm revealed its intention to give partner banks access to digital tokenized solutions, including payment gateways and interoperability with both private and public blockchain networks.
SWIFT Aims to Materialize Years of Research
The SWIFT network, which serves 518 institutions in 22 countries, said it aims to integrate traditional finance with the modern crypto and Web3 industries.
In a series of breakthrough trials, SWIFT successfully tested the interoperability of crypto tokens on its traditional infrastructure, linking it with private and public blockchains.
The company also conducted two-phase central bank digital currency (CBDC) integration trials with commercial banks from Europe, Asia, and North America.
Building on its success, SWIFT now plans to roll out these decentralized features to its partner banks, aiming to enable partner payment processors to seamlessly transact using a variety of existing and emerging asset and currency types.
The firm said:
“We’re looking at ways to connect tokenised asset settlement with the corresponding payment transfer taking place on the Swift network. The payment leg will initially be made using existing fiat currencies, but will later be able to use tokenised forms of money, such as CBDCs, tokenized commercial bank money, or regulated stablecoins.
Tokenized Exchange
Some features SWIFT wants to roll out soon are multi-ledger Delivery-versus-Payment (DvP) and Payment-versus-Payment (PvP) transactions on its global platform.
The firm announced it wants to connect tokenized asset settlement with the corresponding payment transfer on the SWIFT network.
While the payment leg will initially use existing fiat currencies, it will eventually support tokenized forms of money, such as CBDCs, tokenized commercial bank money, and regulated stablecoins.
The development has sparked a mix of reactions from the crypto community, with some welcoming the potential integration of decentralized solutions into traditional finance. However, a debate has emerged over which token should be used on the platform.
XRP proponents advocated using XRP tokens by SWIFT as it is already being used on the XRP ledger for a similar purpose.
https://twitter.com/cryptobluejeans/status/1834212975135047921?t=Sye6tmk6jaTDkcXFhSz8-w&s=19
Zach Rynes, community head at Chainlink, countered that Ripple and the XRP community are mistaken, as SWIFT is already collaborating with Chainlink.
He noted that the payment network is utilizing its Cross-Chain Interoperability Protocol (CIP) technology to connect member banks to public and private chains.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
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