What to Know:
- Swift teams up with 30+ banks and Consensys to test a blockchain ledger.
- It will provide real-time, 24/7 cross-border payments.
- Adoption depends on token rules, regulatory approval, and bank cooperation.
Swift, the global system that helps banks talk to each other and move money across borders, is making a big change. It just announced that it will add a blockchain-based shared ledger into its existing infrastructure. The goal: make cross-border payments easier, faster, and always-on.
The move was unveiled at Swift’s Sibos conference in Frankfurt today. Swift says it will work with more than 30 financial institutions and blockchain company Consensys to build a prototype of this new digital ledger.
The first use case they are focusing on is real-time, 24/7 cross-border payments. That means money could move between banks in different countries at any hour, not just during business hours.
Why Swift Is Making This Move
Swift already has a massive network: over 11,500 banks and financial institutions in more than 200 countries use it. But traditional cross-border payments have limitations: delays, multiple intermediaries, varied compliance rules, and hidden fees.
By adopting a blockchain-style ledger, Swift hopes to let banks exchange regulated, tokenized value in a secure log. In its press release, Swift says the new ledger will “record, sequence and validate transactions and enforce rules through smart contracts.”
Importantly, Swift is clear the ledger is about infrastructure. The types of tokens aka stablecoins, CBDCs, or other regulated digital assets will be decided by banks and regulators, not Swift itself.
Swift’s CEO, Javier Pérez-Tasso, said, “We provide powerful and effective rails today and are moving at a rapid pace … with our community to create the infrastructure stack of the future.”
How It Will Work & What It Needs
Consensys will help build the first version. That means drafting what the ledger should do, how it records data, how it connects to existing systems, and how smart-contract rules could work. The new ledger must communicate with existing banking systems and other blockchains. Swift says it will support both private and public networks.
Banks, central banks, and regulators will decide how token systems will work, which tokens are allowed, how rules are enforced, and how cross-border laws are followed. Potentially, this ledger could be used for more than just payments. Over time, Swift could expand to support tokenized assets or central bank money across borders.
Reactions & Challenges
Many banks are backing this move. In the announcement, major names like Bank of America, HSBC, Citi, Deutsche Bank, and ANZ are already part of the working group.
Still, it’s a big task. Switching from legacy banking systems to something blockchain-based is complex. Ensuring security, consistency, regulatory compliance, and handling cross-border legal differences will be major hurdles.
Some observers view this as Swift’s answer to stablecoins. Stablecoin systems allow people to move money directly without intermediaries, something that challenges Swift’s traditional role. By building its own ledger, Swift may protect its future role in global finance.
What to Watch Next
How well the prototype works and which big banks decide to use it first will determine how well Swift’s new blockchain-based ledger does. Some important questions are which tokens or digital assets will be supported, like stablecoins or CBDCs, and how regulators will deal with the idea of token systems moving across borders. The project will also be judged on whether it can make transactions faster and cheaper than current systems. In the end, its success will depend on banks working together: if the big players agree to use it, it could spread quickly.
Adding a blockchain-based ledger to Swift is a big deal. This shows that the world’s financial system is getting ready for a new future, where tokenized assets and payments that are always on could become the norm. If this works, the way money moves between countries may change forever.
Also Read: Peter Schiff Warns Gold May Put Bitcoin ‘Out of Business’
