- •SWIFT and ConsenSys are developing a blockchain for 24/7 real-time cross-border payments.
- •The blockchain platform will support tokenized assets and ensure network interoperability.
- •SWIFT's blockchain aims to improve payment security, reduce fraud, and enhance efficiency.
SWIFT is teaming up with ConsenSys, an Ethereum ecosystem developer, to create a blockchain settlement system. The new system aims to enable real-time, 24/7 cross-border payments. It would also focus on interoperability with both existing and emerging networks. The partnership involves over 30 financial institutions working together to develop the infrastructure.
During the first phase ConsenSys would be responsible for developing the prototype. The plan is for SWIFT to expand its messaging platform into the digital realm with blockchain. The platform would also support tokenized assets, though the kinds of assets would be up to banks. The initiative is aimed at increasing the speed and safety of cross-border payments.
Revolutionizing Cross-Border Payments
Blockchain technology, once seen as unnecessary in traditional finance, is now gaining traction. SWIFT’s new system would create a real-time transaction ledger. This would make cross-border payments faster, more secure, and less prone to errors. The platform aims to reduce fraud risks and improve payment accuracy.
SWIFT’s infrastructure is used by more than 11,500 financial institutions in over 200 countries. This new blockchain initiative may transform the way those institutions perform payments.
Sixteen countries' financial institutions are giving feedback on the design of the ledger. After the prototype is developed and proven, SWIFT would work with its worldwide users to roll out the new system. Significant institutions implicated are JP Morgan Chase, Bank of America, Wells Fargo, Citi and Deutsche Bank.
SWIFT intends to ensure the new system is compatible with both centralized and noncentralized networks. The platform would offer tools that make it easier for private and public blockchains to work together. This would create smooth flow between digital assets and fiat. The goal is to foster more interconnectivity between various financial ecosystems.
Bridging Finance and Digital Assets
SWIFT has already been working with blockchain technology, especially in tokenization and shared ledgers. In March 2024, it had seen the potential of tokenized assets. This alliance builds on that previous work but now with greater emphasis on developing a secure and efficient financial system.
The new blockchain is aimed at connecting traditional finance and digital assets. While SWIFT does not instruct banks how to handle individual transactions, the system is a world leader in secure messaging and transactions technology.
The blockchain initiative comes as the financial sector seeks quicker, more affordable cross-border transfers. Traditional methods, like SWIFT's messaging system, are costly and slow. Blockchain offers a more efficient solution for global money transfers.
Related: SWIFT, Linea Launch Blockchain Pilot for Cross-Border Payments
SWIFT announced late in 2024 that North American, Asia and European banks would trial digital assets over its network. The trials are designed to provide financial institutions ready access to multiple digital asset markets. The initiative would help integrate digital currencies with traditional financial systems.
With the integration of blockchain, SWIFT is getting ready to be a part of a rapidly evolving industry. This program helps SWIFT to retain pole position in financial messaging. SWIFT would make sure it remains capable of offering secure and swift payment services throughout the world, thanks to blockchain.
The project could also help address challenges related to financial sanctions. Exclusion from SWIFT could have severe consequences for countries and institutions. By integrating blockchain, SWIFT ensures it remains a vital part of the global financial system.
This partnership between SWIFT and ConsenSys demonstrates the increasing role of blockchain in finance. As more banks implement blockchain, SWIFT’s role in securing payments would become all the more important. The project has the potential to herald a new era in global finance.