Coinspeaker SWIFT to Conduct Live Digital Asset Trials: Way for Blockchain Integration in Banking
Renowned global fintech communication giant, the Society for Worldwide Interbank Financial Telecommunication (SWIFT), is working on taking a major leap into the digital asset world. According to a report by Bloomberg, next year, commercial and central banks could participate in live trials for digital asset transactions on the SWIFT network.
This move can potentially help accelerate blockchain adoption across financial institutions worldwide.
SWIFT securely transmits millions of messages daily between over 11,000 financial institutions across 200 countries. It has already demonstrated that its infrastructure can handle tokenized value transfers across various blockchain networks. The upcoming trials are a major step in bridging the gap between traditional finance and blockchain-based systems.
Addressing ‘Digital Islands’ in Blockchain Adoption
SWIFT’s head of innovation, Nick Kerigan, noted the importance of ensuring that digital assets created on different platforms can work together, without forming isolated systems, often referred to as “digital islands”.
Kerigan explained that SWIFT has been working to assist the industry in finding a solution that ensures cryptocurrencies, regardless of where or on what technology they are created, can effectively operate with one another and integrate seamlessly with the current system.
His statement clearly implies that SWIFT aims to foster interoperability, allowing various blockchain platforms to integrate seamlessly with traditional financial networks. This approach will prevent the fragmentation that has occurred as banks like JPMorgan Chase and Citigroup develop their own blockchain systems, making it difficult for these platforms to communicate with each other.
The initiative aligns with the broader trend of banks and financial institutions exploring the tokenization of assets. A report predicts that the tokenized assets’ value would reach $30 trillion in the next ten years if blockchain technology and networks continue to gain demand.
Last year, the company’s innovation head, Tom Zschach, also noted the importance of blockchain interoperability and integration by stating, “For tokenization to reach its potential, institutions will need to be able to connect with the whole financial ecosystem seamlessly.”
SWIFT Expands Blockchain Integration
Since 2021, SWIFT has been in the news several times for its involvement with blockchain technology. It has conducted a series of trials under a sandbox environment. Now, for the first time, these trials will happen on SWIFT’s live network, covering both payments and securities settlement.
While the organization has not disclosed which banks will participate in these live trials, past participants in SWIFT’s blockchain experiments include major players like Deutsche Bank, HSBC, and Santander.
With blockchain technology increasingly embraced by the financial sector, SWIFT’s ability to adapt and integrate these innovations will be important to maintaining its relevance. As Kerigan noted, SWIFT’s value is tied to how well it serves the financial community.
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SWIFT to Conduct Live Digital Asset Trials: Way for Blockchain Integration in Banking
