Global cross-border payment processing facility Swift announced that starting next year, banks in North America, Europe and Asia will begin field trials of digital asset and currency transactions over the Swift network. This marks the beginning of years of experimentation, with financial institutions able to use Swift connections to trade swaps between existing and emerging asset and currency types.

The RWA market is promising, Swift "connects digital islands"

Swift is the leader in global cross-border payment delivery systems, with services in more than 200 countries and regions, more than 11,500 participating financial institutions, and a total of 4 billion accounts connected around the world. As the lowest standard setter for financial institutions, it handles more than 40 million transactions every day, and every move affects the future direction of finance.

134 countries are currently exploring CBDCs, and Standard Chartered and Synpulse predict the market for tokenized assets (RWA) will be as high as $30 trillion by 2034. And a survey by Bank of New York Mellon (BNY) showed that up to 91% of institutional investors are interested in investing in tokenized assets.

Before digital assets and cryptocurrencies can become globally popular, they must overcome the differences between different platforms, technologies, and regulatory environments. These differences have caused various RWA projects to become "digital islands", unable to further expand business, and increasing transaction costs. and risks, which is also the goal that Swift's "Connecting Digital Islands" project strives to overcome. Further field trials will leverage Swift's existing global network to interconnect various digital and traditional currency platforms, providing banks with a single system for cross-border transactions of digital and fiat currencies, and further helping the growth of this new market.

(SWIFT "Connecting Digital Islands" completed the trade, securities and foreign exchange sandbox experiment, and Taiwan also participated)

Central banks are also participating in next year’s pilot phase

In preparation for next year's trial, the Hong Kong Monetary Authority (HKMA) and the French Central Bank are leveraging Swift's capabilities to experiment with foreign exchange use cases as part of the European Central Bank's (ECB) exploration of new technologies for wholesale payments.

This test has been upgraded to a live trial, which means it will be tested in a real environment. Through the participation of actual users, it can better evaluate the performance and effect of the entire technology or system in real situations, which also symbolizes Years of experiments will become reality.

Swift was also recently appointed as a participant in the Bank for International Settlements (BIS) project Agora, working with seven central banks to explore blockchain-based tokenization plans.

(Bank for International Settlements Blockchain Project Agorá: Seven central banks explore the combination of tokenized finance and CBDC)

Swift Chief Innovation Officer Tom Zschach said:

For digital assets and currencies to be successful on a global scale, they need to be able to coexist seamlessly with traditional forms of money, and we are now focused on demonstrating this in mainstream real-world applications.

This article The bridge between digital assets and traditional currencies, Swift announced that it will enter field trials in 2025, first appeared on Chain News ABMedia.