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Swift has announced a major step toward integrating digital assets with traditional financial systems, as stated in its press release issued on 3 October 2024.
Swift is a global cooperative and the leading provider of secure financial messaging services, connecting over 11,500 banking and securities organizations, market infrastructures, and corporate customers in more than 200 countries. Although it doesn’t hold funds or manage accounts, Swift enables the reliable exchange of standardized financial messages, supporting both global and local financial transactions. The cooperative is known for its focus on operational excellence, cybersecurity, and facilitating access, integration, and regulatory compliance for the financial industry. Swift also plays a key role in shaping market practices, setting standards, and fostering collaboration across the global financial community.
Central and commercial banks will be able to conduct trial transactions of digital currencies and assets via the Swift network, highlighting the cooperative’s role in connecting more than four billion accounts across 200 countries and territories. Swift noted that the trials aim to show its ability to facilitate the seamless transfer of various types of value across both traditional and digital platforms.
According to Swift’s press release, the organization has already successfully demonstrated its capacity to transfer tokenized value across public and private blockchains, linking central bank digital currencies (CBDCs) on a global scale. The new pilots will now expand on this, exploring how Swift can offer its network of financial institutions a single access point to various digital assets and currencies. The trials are designed to focus on real-world applications in payments, foreign exchange (FX), securities, and trade, utilizing multi-ledger Delivery-versus-Payment (DvP) and Payment-versus-Payment (PvP) mechanisms.
Swift’s statement highlighted the complexity of the current landscape, with 134 countries exploring CBDCs and the tokenized asset market projected to reach $16 trillion by 2030. Swift pointed out that the growing fragmentation of unconnected platforms is creating ‘digital islands,’ which present a barrier to global adoption. By leveraging its central role in the financial system, Swift aims to connect these disparate networks, as well as integrate them with existing fiat currencies, enabling its members to transact smoothly between digital and traditional forms of value.
The press release also mentioned Swift’s involvement in Project Agorá, a collaborative initiative led by the Bank for International Settlements (BIS). This project is aimed at integrating tokenized commercial bank deposits and wholesale CBDCs on a unified platform. Swift emphasized its continued commitment to innovation, aiming to provide the financial community with the tools to handle emerging forms of value alongside traditional currencies.
Tom Zschach, Swift’s Chief Innovation Officer, said that for digital assets and currencies to succeed globally, they must coexist seamlessly with traditional money. He added that Swift’s extensive global reach positions it uniquely to bridge both emerging and established forms of value. According to Zschach, Swift is focused on demonstrating its capabilities in real-world scenarios while maintaining the same secure infrastructure its clients already rely on.
Swift pointed out that its platform does not hold funds or manage accounts but serves as a secure financial messaging network. With more than 11,500 connected financial institutions and a presence in over 200 countries, Swift plays a key role in global financial flows, supporting both trade and commerce through reliable and standardized communication.
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