SWIFT to Test Blockchain Settlement System in 2024
SWIFT, the global financial messaging network, is set to test a blockchain-based settlement system in the first half of 2024. The trial will involve over 30 banks, including PNC Bank and US Bank, and aims to enhance payment speed and reduce transaction delays.
SWIFT's goal is to lessen its dependence on traditional systems and embrace smart contracts and tokenized assets for smoother operations. The project's initial phase involves constructing a prototype on Ethereum's layer-2 network, Linea. This follows successful trials in 2024, including a project with UBS and Chainlink under Singapore's Project Guardian.
SWIFT is partnering with Consensys to develop a blockchain system for real-time cross-border bank payments. The system will serve as a communication layer between banks, validating and recording transactions on-chain, rather than moving funds directly. SWIFT plans to support various types of digital tokens, with the final decision resting with central and commercial banks. Participating banks are expected to include giants like Bank of America, Citigroup, and NatWest. The new platform will facilitate tokenized asset transactions between global financial institutions, including Yahoo Finance.
SWIFT's blockchain initiative could revolutionize its network of 11,500 institutions across over 200 countries, bringing similar speed and efficiency to the global financial landscape.
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