SWIFT will pilot digital assets on the blockchain network by 2025, connecting traditional financial systems with digital currencies and assets, aiming for seamless and global transactions.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) announced on October 3 that it will conduct digital asset trials on its platform, expected to begin in 2025. Major banks in North America, Europe, and Asia are preparing to participate in the trials, which are focused on exploring how the banking network can provide financial institutions with unified access to a variety of digital assets and currencies.

Initial trials will focus on payments, foreign exchange, securities and trade-related transactions, using payment-to-payment and settlement-with-settlement models. SWIFT noted that the rapid proliferation of disconnected platforms and technologies in the digital asset economy has created an “increasingly fragmented landscape,” which poses significant obstacles to the global adoption of digital assets. This fragmentation creates a complex network of “digital islands,” limiting the interoperability and efficiency of digital asset transactions.

Source: SWIFT Connectivity and Interaction Goals

SWIFT aims to leverage its unique position – connecting more than 11,000 financial institutions worldwide – to connect these heterogeneous networks together and with existing fiat currencies. This will enable the global financial community to seamlessly transact using digital assets and cryptocurrencies alongside traditional forms of value.

SWIFT’s chief innovation officer, Tom Zschach, said the organization is focused on developing real-world applications that connect emerging and “established” forms of value. He stressed the importance of ensuring that digital assets and currencies can coexist seamlessly with traditional forms of money in order to succeed on a global scale.

SWIFT Chief Innovation Officer Tom Zschach. Source: LinkedIn

SWIFT’s upcoming digital currency trials are a major step forward in the global banking network’s blockchain strategy. On September 16, SWIFT joined the Bank for International Settlements (BIS) Agorá Project, a consortium of central banks that aims to determine how to integrate tokenized commercial bank deposits with central bank digital currencies (CBDCs) for wholesale transactions on a single platform.

SWIFT previously proposed creating a blockchain-based “state machine,” described as a dynamic model that reflects the current state of transactions and balances between organizations in March 2024. The tool could be built on top of the ISO-20022 messaging technology already in use and potentially run on a blockchain or a centralized platform like SWIFT’s Transaction Manager.

In 2022, SWIFT published a report on potential methods for connecting diverse blockchains, aiming to solve the problem of interoperability between chains.