SWIFT is collaborating with Ethereum software giant Consensys and 30 major financial institutions to develop a blockchain-based prototype for real-time cross-border payments. The partnership includes Bank of America, Citi, Deutsche Bank, JP Morgan Chase, and Wells Fargo, among other banking participants.
The prototype will use a secure ledger with smart contracts to record and validate transactions operating on a 24/7 basis. SWIFT envisions the ledger as a real-time log of transactions between financial institutions that will record, sequence, and validate payments while enforcing rules through programmable contracts.
Neither Consensys nor SWIFT disclosed whether the prototype is being built on the Ethereum mainnet or the layer-2 network Linea, which Consensys incubated. Both organizations declined to share additional technical details at this time. Consensys described the development as a defining moment for both traditional and decentralized finance.
SWIFT's core functionality centers on its messaging system rather than payment rails. The network does not hold customer funds or clear and settle payments directly. Instead, it provides the infrastructure through which banks, brokerages, and financial institutions communicate transaction details, including amounts, currencies, and recipients.
The SWIFT network connects 11,500 institutions across more than 200 countries and territories. In 2022, SWIFT messages corresponded to a daily net value of around $7.5 trillion, according to Citi research. The network processes approximately 53 million financial messages daily.
If even a small fraction of SWIFT's volume moved on-chain, it would significantly impact blockchain throughput. Ethereum mainnet processed 1.4 million transactions yesterday, meaning just 6% of SWIFT's volume would double Ethereum's daily activity. The effect would be more dramatic on Linea, which handled 145,000 transactions yesterday and would only need 0.51% of SWIFT's volume to double its throughput.
Consensys called SWIFT's plans to extend its network with blockchain infrastructure a convergence rather than a clash between traditional and decentralized finance. The company emphasized that this reflects collaboration between established financial systems and emerging blockchain technology rather than competition.