Blockchains are always synonymous with the wild world of cryptocurrencies, but on Monday, 30 banks and Swift – the largest cross -border payment service in the world – have made a total part of the global financial system.
Swift – alias Society for Worldwide Interbank Financial Telecommunication – provides a messaging service that financial institutions use to move money around the world. The service is widely used but is slow because, as Anz Bank explains, Swift “does not really move money. “”
“This means that payment instructions and fund movement occur separately, often requiring a complex network of corresponding accounts and banks to allow payment to be processed. This disconnection can slow down payments and lead to a lack of visibility for the sender and the recipient. ”
This can also mean that cross -border payments take a few days.
Swift problems are well known and the types of financial services see service as sound – but also sand in world trade gears.
Blockchain enthusiasts who have seen cryptocurrency transactions collapse quickly through distributed books, therefore wondered if their favorite technology could improve the speed of cross-border cash transfers. Many startups, some with the support of sensible central banks, have explored this idea, generally by offering “stablescoins” – digital currencies fixed at the value of a fiduciary currency – which would be exchanged on a blockchain to provide faster establishments than Swift cannot realize it.
China has similar ideas: an application for its digital yuan allows rapid cross -border transactions in the currency of the middle kingdom, and not the US dollar which is often used to move money worldwide. If China could use its digital currency to control a global trade section, it could weaken Western institutions like Swift.
Almost everyone plans to use a blockchain to move money worldwide, imagine by suppressing Swift, by stealing many of their activities.
It is therefore not surprising that SWIFT on Monday announced its intention “to add a large shared book based on blockchain to its technological infrastructure, a central stage for global finance which promises to make instant cross -border transactions and always on an unprecedented scale.”
Swift will also create tools to integrate its existing payment systems and its new blockchain.
“It is planned that the big book – a secure and real -time newspaper transactions between financial institutions – records, sequented and will validate transactions and will apply the rules through intelligent contracts,” said Swift’s announcement. “It will be built for interoperability, both with existing and emerging networks, while maintaining confidence, resilience and compliance synonymous with rapid and criticism for the secure functioning of global finance.”
34 financial institutions from 16 countries have registered to design the big book, with the help of Ethereum Consensys.
Swift did not predict when this big book is put online, which is probably reasonable because projects of this magnitude can easily be in the form of a pear and previous attempts to use blockchains for critical high -volume mission systems went badly.
But for the moment, an entity which for decades has played an important role in the world economy has decided that it should be rebuilt on the blockchain.
In some ways, it is commonplace because very few people have to worry about the plumbing technology that their banks use. Swift adopting the blockchain, however, will probably bring token assets closer to the dominant current. ®
