Benzinga and Yahoo Finance LLC may earn commission or revenue from select articles through the links below.
The circulatory system of the financial world has just received a major upgrade announcement. Swift, the Belgium-based network that powers billions of dollars in daily cross-border transactions, announced September 29 that it is collaborating with more than 30 major banks to build a blockchain-based infrastructure that could make instant international payments and finally reject traditional banking with the emerging world of digital currencies.
At its core, the initiative aims to establish a shared digital ledger that would enable 24/7 cross-border payments in real time while making Swift’s systems compatible with stablecoins, tokenized bank deposits and central bank digital currencies being developed by governments around the world.
Don’t miss:
For decades, sending money internationally has been painfully slow and expensive. Wire transports can take days to set up, with fees accumulating at each intermediary bank along the chain. Swift’s current advantage is its existing network spanning more than 200 countries and connecting more than 11,000 banks, but the system has drawn criticism for being outdated in an age when you can send a text message around the world in milliseconds.
Blockchain redesign addresses this one. The timeline has not yet been set, but the initial goal will be to enable instant cross-border payments, which should also reduce costs given the current multi-day settlement process.
The heavyweight banking consortium behind this includes JPMorgan Chase & Co. (NYSE: JPM), HSBC Holdings PLC (NYSE: HSBC), Deutsche Bank AG (NYSE: DB), Mitsubishi Ufj Financial Group Inc. (NYSE: MUFG), BNP PARIBAS SA, BANCO SANTAND as well as institutions from the Middle East and Africa.
Trending: Microsoft’s climate innovation fund just backed this farmland manager – And accredited investors can join the same fund
The announcement comes as stablecoins – cryptocurrencies pegged to traditional currencies like the dollar – move from fringe digital assets to serious financial infrastructure. A recent CITI report estimated that there could be up to $4 trillion worth of stabriscins in circulation by 2030, with $100 trillion in trade conducted using the aid each year.
