(11 September 2024 – Global) Global banking cooperative Swift is advancing plans to provide its member banks with access to new digital asset classes and currencies via its network.
This initiative will cover various use cases, including payments, securities, foreign exchange, trade, and more.
Over the past few years, Swift has been conducting trials to explore interoperability with Central Bank Digital Currencies (CBDCs), private blockchain networks, and tokenized assets.
Now, the Brussels-based messaging network is preparing to transition toward real-world applications that can connect different types of digital assets and currencies. Among its plans are tests to facilitate multi-ledger Delivery-versus-Payment (DvP) and Payment-versus-Payment (PvP) transactions across its network.
“Without a globally accepted digital form of money, executing the cash leg in DvP settlement poses significant challenges,” Swift states. “We are exploring methods to link tokenized asset settlement with corresponding payment transfers on the Swift network. Initially, the payment leg will be handled using existing fiat currencies, but the system will eventually support tokenized forms of money, such as CBDCs, tokenized commercial bank money, and regulated stablecoins.”
In addition, Swift is testing how its interlinking capabilities could connect emerging bank-led networks, like the US Regulated Settlement Network, with other financial infrastructures.
Moving forward, Swift plans to develop technical standards and assess how implementation will impact workflows, market practices, and standards to achieve widespread scalability.