Swift has announced that central and commercial banks may use the Swift network to carry out trial transactions of digital currencies and digital assets. The project kicks off in 2025.
The digitization of assets has been ongoing for years. Digital assets can take many forms, including securities, currencies, commodities, deposits, and more.
Swift says that its digital asset pilot program will demonstrate its ability to facilitate the movement of value among its four billion accounts around the world. Swift notes that it has already shown that it can transfer tokenized value across public and private blockchains, interlink central bank digital currencies (CBDCs) globally. The goal is to seamlessly integrate digital assets into the global financial system with first cases focusing on payments, FX, securities and trade.
Swift points to industry activity that indicates 134 countries are looking at CBDCs. At the same time, tokenized assets are expected to grow to $16 trillion by 2030.
As a global messaging service for financial firms, Swift must keep pace with Fintech innovation to remain relevant. Over 11,000 institutions are connected to its network in all countries around the world.
Javier Pérez-Tasso, Swift’s Chief Executive Officer, says the company is “fundamentally transforming the international payments and securities experience” and delivering faster, frictionless transactions worldwide.
This past spring, Swift announced two AI experiments collaborating with its member banks to explore how the technology could combat cross-border payments fraud. An experiment with CBDCs took place in March.
In recent days, Swift was named a participant in Project Agorá, a Bank for International Settlements-led project exploring the integration of tokenised commercial bank deposits and tokenised wholesale CBDCs on a unified platform.
Arthur Firstov, Chief Business Officer at Mercuryo, shared a comment on Swift’s decision to let banks begin live trials of digital assets:
“We welcome Swift’s move to begin live trials involving digital assets next year. Myriad use cases for digital assets are emerging in the payments domain, and in the fields of securities and foreign exchange. As TradFi seeks to integrate decentralised ledger technologies we will see more seamless interaction between traditional finance and applications in the digital asset space. This will only add momentum to the growth of the emerging digital token economy. The blockchain undoubtedly represents a ground-breaking technology for payments that is sure to play a major role in the evolution of finance through the course of this decade.”