🌐 SWIFT Moves Towards Blockchain Technology for Cross-Border Payments
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is collaborating with Consensys, an Ethereum ecosystem developer, and more than 30 finance firms to build a blockchain-based settlement system. Announced on Monday, the project aims to enable cross-border payments in real-time, 24/7, while remaining compliant and interoperable with existing and future networks.
In the first phase, Consensys will develop a conceptual prototype, with subsequent phases defined by central and commercial banks to determine which tokenized assets the network will support.
As per the announcement:
“The ledger will extend SWIFT’s financial communication role into a digital environment,” signaling a significant step toward the digitalization of interbank settlement.
💻 A Digital Backbone for Global Finance
Blockchain has evolved from a conceptual solution to a technology gaining serious traction in financial circles. SWIFT is building a real-time ledger of interbank transactions. With over 11,500 institutions in more than 200 countries relying on SWIFT to process payments, this is a crucial development.
While SWIFT does not move money directly, its system reduces errors and fraud risks, making its messaging network vital. According to the Federal Reserve Bank of New York report, sanctions limiting access to SWIFT are extremely costly for affected countries or banks, due to limited alternatives.
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🔗 SWIFT’s Ongoing Blockchain Exploration
This initiative builds on SWIFT’s prior blockchain ventures. In March 2024, the organization endorsed tokenization concepts and supported shared ledger models for financial transactions. While distributed ledgers face challenges with transaction volume, SWIFT emphasized that messages must remain synchronized across multiple parties.
In 2024, SWIFT collaborated with UBS Asset Management and Chainlink on Project Guardian, supported by the Monetary Authority of Singapore, to connect fiat payments with token processes. Banks across North America, Europe, and Asia also trialed SWIFT’s network to explore unified access to multiple digital asset classes and currencies.
SWIFT now relies on its new partnership with Consensys to enhance traditional payment systems, improving operational efficiency, security, transparency, and compliance.
