Swift Readies Ledger for 24/7 Token Transfers—Though True Settlement Is Stuck on Old Rails

Swift, the financial gatekeeper that connects thousands of banks around the world, said Thursday that more than a dozen institutions are preparing to use its “blockchain-based ledger.”

The member-owned cooperative, which has served as the backbone of the traditional financial system for decades, expects 17 banks on six continents to participate in a pilot program exchanging tokens representing deposits. announcement.

To underline the potential weight of the pilot, participating institutions include several banks assigned as Global Systemically Important Banks by the Financial Stability Board, such as BNP Paribas, BNY, Citi, HSBC, Standard Chartered, UBS and Wells Fargo.

While final fiat settlement during business hours still relies on legacy systems, Swift noted that the blockchain-based ledger allows banks to move tokenized deposits “at night and on weekends,” a feature inherent to all networks operating in the cryptocurrency world.

“Banks benefit from an improved customer experience and global liquidity efficiency without compromising the compliance, credit, risk and control standards embedded in existing payment processing,” Swift said.

The announcement reflects the ways in which traditional financial intermediaries are adopting blockchain in ways that fit their existing businesses while embracing the efficiencies that Wall Street executives enjoy. pointed out for years.

“We are redefining cross-border payments with Swift’s new blockchain-based ledger, combining tokenized deposits with our global network to enable instant, always-available money movements,” said Mahesh Kini, global head of cash management at Standard Chartered.

In a March blog postSwift said its network has an architecture compatible with the Ethereum virtual machine (EVM), the software environment underlying one of crypto’s popular permissionless networks. Yet Swift’s network is largely centralized. It manages a shared environment for transactions, while banks retain authority over their own assets.

Networks like XRP Ledger (XRPL) is designed as a cheaper, faster alternative to Swift’s technology stack, specifically aimed at low settlement speeds. More recently, Canton Network has gained momentum among financial institutions through balancing privacy compliance.

Financial incumbents like JPMorgan have been involved with blockchains for years. rebranding its flagship solution and tokenization unit for Onyx’s Kinexys in 2024. Swift noted in its announcement Thursday that its product was created in nine months.