LONDON – The global financial-messaging network SWIFT and more than 30 global banks have announced they are now working “at pace” on making cross-border payments instantaneous and on a system capable of handling the various new forms of digital money.
SWIFT, which is a fundamental part of the world’s financial architecture, said the institutions were collaborating on a blockchain-based “shared digital ledger” they see as vital for modernizing international bank transactions, according to Reuters.
The timeline is yet to be defined, but it will initially focus on enabling real-time, 24/7 cross-border payments, which should also make the process cheaper given it can currently take days, Reuters added.
Building on Pilot
Belgium-based SWIFT also plans to build on recent pilot projects to make its systems “interoperable” with new ones now emerging for stablecoins, tokenized bank deposits, and central bank digital currencies (CBDCs) being developed by the likes of China and the European Central Bank, the report stated.
Reuters noted SWIFT’s main advantage is that its existing network is already usable in more than 200 countries and connects more than 11,000 banks that use it to send trillions of dollars every day.
The report reminded that Eric Trump recently described SWIFT as “antiquated,” but its hope is that by adding blockchain functionality it can evolve and still provide the compliance and resilience features traditional banks require, noting that stablecoins are rapidly moving from niche crypto instruments into the mainstream.
Up to $4 Trillion in Circulation
A report by Citi last week estimated there could be up to $4 trillion worth of stablecoins in circulation by 2030, with $100 trillion of trade to be done using them a year, according to Reuters, which further noted that about 90% of the world’s central banks are now exploring digital versions of their fiat currencies as they look to avoid getting left behind.
