- Global messaging system Swift has partnered with banking groups and Consensys to create a prototype for its “blockchain-based shared ledger.”
- The platform aims to provide faster, accessible, and cheaper cross-border payments.
The writing has been on the wall. Swift (Society for Worldwide Interbank Financial Telecommunication), recognizing that how blockchain-based payment system like Ripple threatens its operation, has announced its adoption of a distributed ledger technology (DLT) solution.
Swift Partners with Consensys
According to the global messaging system for banks, it has partnered with over 30 international financial institutions. These include ANZ, Banco Santander, Bank of America, BBVA, Deutsche Bank, HSBC, JPMorgan Chase, and Westpac. They aim to design and develop a “blockchain-based shared ledger” to offer a real-time and more efficient 24/7 cross-border payments network.
The consortium has tapped Consensys, a blockchain software company, for a prototype of the new cross-border payments system. Swift said it will “work at pace” with the company to complete the prototype in phase one. From there, it will also define its future phases of work.
Consensys is known for its suite of developer tools, infrastructure services, decentralized applications (dApps), and other enterprise-grade solutions leveraging the Ethereum (ETH) blockchain. The most popular product of the company is MetaMask, a self-custodial crypto wallet that interacts with the Ethereum chain and dApps. It also built Linea, a Layer 2 (L2) network featuring zero-knowledge rollups (ZK-rollup) for faster and cheaper transactions on Ethereum.
A Departure from Swift’s Messaging System
The move effectively facilitates Swift’s transition from a mere institutional financial communication platform to a digital environment. It will allow the institution to bridge regulated tokenized value across digital ecosystems.
However, Swift clarified that its focus is only on the infrastructure. The tokens to be exchanged on the ledger are governed by commercial and central banks, but Swift will work with them to integrate their systems into the revamped infrastructure.
Swift explained that the blockchain-based ledger will securely track, record, sequence, and validate the transactions between financial institutions through smart contracts. Additionally, it highlighted that the platform will be interoperable with existing and emerging banking networks.
“We provide powerful and effective rails today and are moving at a rapid pace with our community to create the infrastructure stack of the future,” remarked Swift CEO Javier Pérez-Tasso during the organization’s annual flagship Sibos conference in Frankfurt on Monday. “Through this initial ledger concept, we are paving the way for financial institutions to take the payments experience to the next level with Swift’s proven and trusted platform at the centre of the industry’s digital transformation.”
