Swift, the backbone of the global financial messaging system, takes a step to become an infrastructure supplier in full -fledged blockchain.
This week, the network has unveiled plans to build a large shared book platform that will allow banks to adjust the transactions involving stablescoins and token assets on several blockchains.
While Swift has long served as a messaging layer for the movement of cross-border money, the new platform would put it closer to the value transfer center.
This is a major change for a traditional financial organization over 50 years old known to manage communications between more than 11,500 banks, not for the movement of money itself.
The changing role of Swift
“Great development is the changing business model of Swift to deal with the dissimilar blockchain,” said Noelle Acheson, author of the Crypto is macro now Bulletin. “Swift, today, does not transfer value; He sends messages. Onchain, the message and the transfer are the same thing.
Acheson argued that the new platform could act as a layer of “switching” for digital currencies and tokenized assets, puncturing otherwise partitioned systems. However, she asked if Swift was still essential in a world of programmable money.
“Is Swift necessary in a tokenized financial system? No, this is not the case-but it has links with almost all world banks,” she said.
Stablecoins integration banks
These connections could give Swift an advantage while banks are looking for a path to the blockchain economy.
“The industry is evolving at a rapid rate, and the stablecoins are adopted worldwide at a speed such that traditional banks must take note,” said Barry O’Sullivan, director of banks and payments in OpenPayd.
Swift said that more than 30 financial institutions were already engaged in the project. O’Sullivan expects more to follow as demand and regulatory clarity increase. “Adoption, interoperability and regulatory alignment will take time,” he said. “However, Swift is clearly positioned to play a significant role in the formation of the stable ecosystem and the tokenive asset ecosystem.”
The Swift platform could also “lower” technical obstacles and integration costs for financial institutions that wish to integrate stablecoins into their operations, said David Duong, head of institutional research in Coinbase, said.
O’Sullivan noted that the platform could bring “a certain standardization to the global ecosystem of Stablecoin”, although the fragmentation probably persists. “Existing private stables, CBDCs and regional solutions can continue to operate in parallel,” he said.
Manufacturing years
Duong described Swift’s initiative as a “moment of the watershed” for crypto and traditional finance, but recalled that it was years old. The company is experimenting with the technology of registers distributed since 2017, said Duong, in particular the realization of pilot projects with Chainlink, platforms of tokenized titles Clearstream and SETL and interoperability tests with CBDC. The development of its own shared register platform seems to be the next step in this long-term transition, said Duong.
However, not everyone can see Swift as a neutral player. Its role in the application of sanctions led to distrust of countries where banks have been cut off from the network, said Acheson.
“It is not clear that its offer would prevent the fragmentation of payment systems, given the global distrust after the role of SWIFT in the application of American and European sanctions,” she said.
Despite this, Swift’s decision stresses that the borders between traditional finance and blockchain finance become increasingly intertwined and that the world’s largest financial institutions are – slowly, then suddenly – to take the initiative to remain relevant.
