cryptopolitan.com
SWIFT announced that banks in North America (the U.S. and Canada), Europe, and Asia would embark on live digital assets and currency transaction trials over its network starting in 2025. The pilot, involving commercial and central banks, will demonstrate how the SWIFT connection handled the transactions of existing and emerging digital assets and currency types.
Tom Zschach, SWIFT’s chief innovation officer, disclosed that the messaging network intended to use its resilient and secure infrastructure to offer seamless execution and tracking of all asset transactions. A Celent and BNY Mellon survey revealed that over 90% of institutional investors were interested in tokenized assets. Another study by Standard Chartered and Synpulse predicted that the tokenized assets market could rise to $30 trillion by 2034 as 134 countries explored CBDCs (central bank digital currency).
SWIFT is positioning to bridge emerging and existing asset classes
Commercial and central banks will be able to conduct live trials of digital-asset transactions on the Swift messaging network starting next year https://t.co/YNRcvrsW7S
— Bloomberg (@business) October 3, 2024
Zscach claimed that digital assets and currencies must coexist with traditional money for global success. He added that SWIFT’s global reach uniquely positioned it to bridge emerging and established asset classes. During the 2025 trials, more focus was on demonstrating how this would work in real-world mainstream applications. According to BNY Mellon’s survey, 41% of institutional inventors held cryptocurrencies in their portfolios, while 15% planned to start in the next two years.
SWIFT declared that recent experiments had proved its ability to integrate multiple digital assets and currency networks, interlink CBDCs globally, and connect public and private blockchains. It added that the 2025 trials aimed at providing a single system for banks to transact fiat and digital currencies across borders.
Banque de France and the Hong Kong Monetary Authority were leveraging SWIFT’s network in experiments for foreign exchange use cases. SWIFT unveiled that this was part of the European Bank’s ongoing initiative to explore new technologies supporting batch payments.
“As new forms of value emerge, we intend to continue offering our community the ability to seamlessly make and track transactions of all kinds of assets – using the same secure and resilient infrastructure that is integral to their operations today.”
–Tom Zschach
The global payments messaging system affirmed that it was investigating its interlinking capabilities in integrating bank-led networks like the U.S. Regulated Settlement Network with traditional monetary systems. SWIFT was recently named part of Project Agora, which is exploring the integration of tokenized wholesale CBDCs and commercial bank deposits on a single platform.
CBDCs could streamline SWIFT’s global interoperability
Atlantic Council’s latest digital currency figures showed that 134 countries and currency unions were in the race to explore CBDCs. The Council stated that significant work was still required to integrate CBDCs into the global economy. SWIFT’s Phase 1 and Phase 2 CBDC sandbox projects demonstrated how CBDCs could be interlinked across multiple asset and currency networks. Its ‘blockchain interoperability experiments’ proved it had the infrastructure to support tokenized value transfer across private and public chains.
China, Jamaica, Nigeria, and the Bahamas had already launched their CBDCs, and issuance had increased substantially, according to the Council’s data. China’s digital yuan e-CNY was still the largest CBDC pilot in the world, with a transaction volume of $986 billion (~7T Yuan) covering 17 provinces and multiple sectors.
The U.S., every G20 country, and the original BRICS members like South Africa and Russia participated in cross-border wholesale CBDC projects. Project mBridge, one of the 18 cross-border CBDC projects, linked banks in Saudi Arabia, China, UAE, Thailand, and Hong Kong. The Atlantic Council added that the digital euro was among 44 ongoing CBDC pilots, and all CBDCs in advanced retail CBDC projects were distributed through intermediaries such as banks, payments service providers, and financial institutions.