Global Messaging Hub Swift has spent decades building a global system for cross -border payments, and now it plans to launch a solution based on blockchain incorporating digital assets.
In collaboration with around 30 global financial institutions, SWIFT develops a large shared digital book designed to be interoperable with existing block chains, including those supporting stablescoins, tokenized deposits and transactions of the Central Bank digital currency (CBDC).
The platform is envisaged as a secure and real-time recording of banking transactions, taking advantage of intelligent contracts to apply compliance. Its ultimate goal is to allow cross -border payments in real time.
Checks and counterweights
The costs and ineffectiveness of cross -border payments have long been a challenge – one of the main reasons why SWIFT has carried out such a strong global presence. The organization has built a network that connects more than 11,000 banks in 200 countries.
By providing a critical communication layer, Swift helps to rationalize a model of cross -border payments which traditionally depends on manual checks and balances. Although Swift has improved the corresponding banking system, persistent challenges remain. Shares of regulation, currency conversions and compliance requirements continue to increase costs, cause delays and increase the risk of fraud.
A stronger solution
Due to these problems, digital assets are increasingly considered to be a stronger solution for international transactions. Among them, Fiat stablecoins have become the main competitor, as most cryptocurrencies are very volatile, while CBDC and token deposits have not yet gained significant traction.
Stablecoins based on blockchain allow secure transactions and their decentralized infrastructure makes it possible to send payments worldwide in real time. Another key differentiator is that they do not require a bank account – unlike many cross -border networks, including those of Swift.
Although the Swift network is designed to connect with – rather than competing – Lescoins and existing blockchains, the cross -border payments landscape is becoming more and more congested.
For example, Paypal and Circle now offer stable -co -observe payments and cross -border payments that connect financial service companies. In addition, Visa and Mastercard have launched substantial cross -border payment networks which take advantage of their global presence.
Many banks also develop their own digital asset solutions with potential cross -border capacities. This includes Jpmorgan Chase, who planned to issue his own stablecoin and launched a division of digital assets under his brand Kinexys.
Despite this growing competition, Swift hopes to take advantage of its established network to maintain a leading role in the ecosystem. The organization is also based on its many partner banks to stimulate continuous innovation. For example, several banks collaborating on its new system based on the blockchain include HSBC, Deutsche Bank and Jpmorgan Chase.
