Swift, the mainstream foreign exchange settlement payment system of global banks, previously announced on September 11 that it will introduce blockchain technology as part of the settlement system, and is committed to enabling users to trade regulated assets, including cryptocurrencies, at a faster speed on the Swift network in the future.
On the 3rd, Swift announced again that it will start conducting field trials of digital asset and currency transactions on the Swift network through banks in North America, Europe and Asia in 2025, to promote the process of Swift's integration of blockchain technology.
Coordinated cross-network digital asset and currency transactions for the first time
Swift further explained in the announcement that the trial will demonstrate how traditional financial institutions can use the existing Swift network to conduct swap transactions between existing currency types and emerging assets:
Over the next year we will work with the community to pilot an advanced version of our infrastructure that will be able to coordinate cross-network digital asset and currency transactions for the first time. This initiative marks an important step towards our ultimate vision of providing financial institutions with a single access point for multiple types of digital assets and currencies.
In this regard, Swift executive Tom Zschach also said:
For digital assets and currencies to succeed globally, they must be able to coexist seamlessly with traditional forms of money. With broad global adoption, we are uniquely positioned to build a bridge between emerging assets and established forms of value, and we are now focused on proving this out in real-world mainstream applications.
Solving the problem of digital platform fragmentation
Swift went on to point out that the key purpose of these trials is to address the current problem of fragmented digital platforms, also known as digital silos, which can seriously hinder the widespread adoption of emerging assets.
Swift further explained that 134 countries are currently exploring central bank digital currencies (CBDCs), and according to Standard Chartered Bank and Synpulse, the tokenized asset market could be as large as $30 trillion by 2034. However, if there is a lack of interoperability between platforms, global adoption will remain fragmented, so Swift will also be committed to the interoperability of the global network:
These field trials will leverage our existing global network to interconnect various digital and traditional currency platforms, providing banks with a single system to conduct cross-border transactions using digital and fiat currencies, further facilitating the development of this new market.
Hong Kong Monetary Authority and Bank of France to participate in trial in advance
Finally, Swift added that the Hong Kong Monetary Authority and the Bank of France will use the Swift network to participate in experiments for foreign exchange trading scenarios before the trial begins next year.
Separately, Swift said it is looking at how to integrate its interoperability capabilities into the traditional financial system, as well as emerging bank-led networks, such as those currently regulated in the United States.
In a nutshell, Swift is committed to ensuring that its network of more than 11,500 financial institutions around the world can safely and efficiently support digital asset and currency transactions through existing platforms. In this regard, Tom Zschach also said:
As new forms of value emerge, our goal is to continue to provide our community with the ability to seamlessly trade all types of assets, using the same secure and resilient infrastructure that is integral to our current business operations.
