Swift announced on Thursday that 17 banks across six continents are preparing to participate in a pilot program using its blockchain-based ledger for tokenized deposit transfers. The member-owned cooperative's system allows participating institutions to move tokenized deposits overnight and on weekends, though ultimate fiat settlement still relies on legacy systems during business hours. Participating banks include several Global Systemically Important Banks designated by the Financial Stability Board, such as BNP Paribas, BNY, Citi, HSBC, Standard Chartered, UBS, and Wells Fargo, highlighting the pilot's scope within traditional finance infrastructure.
Swift Pilot Includes 17 Banks Across Six Continents
The pilot program involves the exchange of tokens that represent deposits among 17 institutions spanning six continents, according to Swift's announcement. Participating Global Systemically Important Banks include BNP Paribas, BNY, Citi, HSBC, Standard Chartered, UBS, and Wells Fargo.
Swift stated that banks using the blockchain-based ledger benefit from improved client experience and global liquidity efficiency without compromising compliance, credit, risk and control standards embedded in existing payment processing. Mahesh Kini, global head of cash management at Standard Chartered, stated: "We are redefining cross-border payments with Swift's new blockchain-based ledger—combining tokenized deposits with our global network to deliver instant, always-on money movement."
The product was created in nine months, according to Swift's announcement on Thursday.
Blockchain Ledger Features EVM Compatibility With Centralized Control
In a March blog post, Swift said its network features architecture compatible with the Ethereum Virtual Machine (EVM), the software environment underpinning one of crypto's go-to permissionless networks. Swift's network is largely centralized, operating a shared environment for transactions while banks maintain authority over their own assets.
The blockchain-based ledger allows banks to move tokenized deposits overnight and on weekends, a feature inherent to all networks operating in the cryptocurrency realm. Ultimate fiat settlement still relies on legacy systems during business hours.
Traditional Finance Adopts Blockchain Amid Competing Solutions
The announcement reflects the ways in which traditional financial intermediaries are adopting blockchain in a manner that suits their existing businesses, while embracing the efficiencies that Wall Street executives have pointed to for years.
Networks like XRP Ledger (XRPL) were designed to be a cheaper, faster alternative to Swift's technology stack, specifically targeting slow settlement speeds. More recently, Canton Network has gained momentum among financial institutions by balancing compliance with privacy.
Financial incumbents like JPMorgan have dabbled with blockchains for years, rebranding its flagship solution and tokenization unit to Kinexys from Onyx in 2024.
FAQ
What did Swift announce on Thursday?
Swift announced on Thursday that 17 banks across six continents are preparing to participate in a pilot program using its blockchain-based ledger for tokenized deposit transfers. The system allows participating institutions to move tokenized deposits overnight and on weekends, though ultimate fiat settlement still relies on legacy systems during business hours.
Which banks are participating in Swift's blockchain ledger pilot?
Participating banks include several Global Systemically Important Banks designated by the Financial Stability Board, such as BNP Paribas, BNY, Citi, HSBC, Standard Chartered, UBS, and Wells Fargo. The pilot involves 17 institutions across six continents.
How does Swift's blockchain ledger differ from traditional cryptocurrency networks?
Swift's network features architecture compatible with the Ethereum Virtual Machine (EVM) according to a March blog post, but the network is largely centralized. It operates a shared environment for transactions while banks maintain authority over their own assets, unlike permissionless cryptocurrency networks.
