Swift launches blockchain platform for 24x7 cross-border payments

The global messaging network said 17 banks, including HSBC, Citigroup, BNY Mellon, Standard Chartered and UBS, will pilot live cross-border transactions using tokenised deposits

By Anna Irrera

 

Swift, whose messaging system is used by banks for millions of transactions a day, said a blockchain-based network designed to facilitate round-the-clock money transfers across borders is ready for initial use.  

The Society for Worldwide Interbank Financial Telecommunication said Thursday that 17 banks from around the world are preparing to pilot live transactions using tokenised deposits on its new system. Tokenised deposits are digital representations of customers’ account balances that can be transferred over blockchain rails. 

 

Swift’s ledger allows banks to move funds for customers outside traditional business hours, including at nights and on weekends, before completing the final settlement through existing systems, according to a statement. Banks taking part in initial trials include HSBC Holdings Plc, Citigroup Inc., Bank of New York Mellon Corp., Standard Chartered Plc and UBS Group AG, Swift said. 

 

 

Banks and market infrastructure providers have been testing blockchain-based systems for years, but few projects have achieved broad commercial adoption. One challenge has been interoperability, as many institutions built their own platforms that didn’t always work with others’. 

 

The financial and crypto worlds are moving to address that. Last week, more than 100 financial companies said they had linked up to introduce a joint stablecoin — a type of token pegged to an asset like the dollar and increasingly used for payments. 

 

In June, a group of large banks in the US announced plans for a shared network run by The Clearing House that would connect tokenised bank deposits with traditional payment systems. 

 

Swift first unveiled plans for its blockchain-based system in September. At the time, it said the ultimate goal was to allow for transactions involving various kinds of digital assets, such as stablecoins or other tokenised assets. 

 

As a global financial artery, Swift delivers secure messages among 11,500 banks and financial institutions in over 200 countries and territories, directing trillions of dollars in transactions, according to the release.