SWIFT, Global Banks To Expand Blockchain Use
More than 30 of the largest banks worldwide join in the design, development, and testing of the new offering, SWIFT announced at the Sibos conference.
Big news at this year’s Sibos conference in Frankfurt came right at the opening on Monday. SWIFT announced it would add a shared blockchain-based ledger to its infrastructure, marking a groundbreaking move to accelerate and expand the advantages of digital finance across more than 200 countries and territories worldwide.
The initial focus will be on real-time, 24/7 cross-border payments, and the financial messaging cooperative creates a network connecting over 11,000 banks across more than 200 countries. The launch date hasn’t been announced, but once implemented, this ledger will make cross-border payments less expensive worldwide.
SWIFT and more than 30 leading financial institutions from 16 countries worldwide, including Bank of America, BBVA, BNP Paribas, Citi, DBS, Deutsche Bank, Emirates NBD, First Abu Dhabi Bank, HSBC, JPMorgan Chase, MUFG, OCBC, Royal Bank of Canada, Societe Generale – FORGE, Standard Chartered, and TD Bank, are collaborating on the project. Financial institutions will provide feedback on the ledger’s design, followed by further development and testing.
Initially, SWIFT will collaborate with blockchain software developer Consensys on a conceptual prototype of the ledger, which will support interoperability across current and emerging systems. The model employs the parallel tracks of “upgrading existing rails while creating future digital rails to maximize infrastructure choice for the industry.”
The announcement is significant for several reasons: it demonstrates that SWIFT is poised to leverage the unique strengths of its network for the launch of a global blockchain ledger, and it is backed by most major global banks worldwide. It is also a clear sign to all the various proprietary blockchain ledgers launched by other institutions that today’s plan is the result of a collective effort and will bridge and coordinate what each financial institution has done and is doing in this area.
“Our track record of developing instant cross-border payment capabilities and our early foray into blockchain-based payment solutions enable DBS to meaningfully support SWIFT’s digital shared ledger initiative,” said Lim Soon Chong, Group Head of Global Transaction Services at DBS Bank. “We believe blockchain technology can usher in the next generation of ‘always-on’ and ‘smarter’ financial services. SWIFT’s initiative goes a step further – it is interoperable with traditional correspondent banking rails, has a high transaction capacity within a secure environment, and is accessible by SWIFT’s global banking network. These characteristics are critical in supporting broad-based reach and adoption, and have the potential to form the backbone of a resilient and future-ready global financial infrastructure.”
