The Swift, the spine of the global financial messaging system, holds in becoming a whole blockchain infrastructure provider.
This week, the network Unveiled plans To generate a shared Ledger platform that will allow banks to regulate transactions involving stablecoins and tokenized properties in many blockchains.
While Swift has long served as a messaging layer for cross-border money movement, a new platform will place it in the middle of the transfer of value.
That is a major shift for more than 50 -year -old traditional financial organizations known for handling communications between more than 11,500 banks, not for the transfer of money itself.
Swift’s paper change
“The big development is the change of Swift’s business model to cope with blockchain disintermediation,” said Noelle Acheson, with -set Crypto is macro now Newsletter. “Swift, today, does not transfer value; it sends messages. Onchain, message and move are the same thing.
ACheson argued that the new platform could act as a “moving” layer for digital currencies and tokenized assets, bridging otherwise a sileled system. However, he asked if Swift was still important in a world of programming money.
“Does Swift need a tokenized financial system? No, it’s not – but it has a connection to almost all global banks,” he said.
Onboarding banks in stablecoins
Those connections can provide swift of one side as banks are looking for a path in the blockchain economy.
“The industry is moving fast, and Stablecoins has been adopted worldwide at a speed that traditional banks need to be ignored,” said Barry O’Sullivan, Director of Banking and OpenPayd payment.
Swift said more than 30 financial institutions are engaged in the project. O’Sullivan expects to follow more as an increase in demand and regulation. “The adoption, interoperability and regulation of regulation will last time,” he said. “However, Swift clearly positions itself to play a significant role in shaping the emerging stablecoin and tokenised asset ecosystem.”
The Swift platform can also “material lower” technical barriers and integration costs for financial institutions who want to gem stablecoins in their operations, says David Duong, head of institutional research on Coinbase.
O’Sullivan noted that the platform could bring “some standard in the global Stablecoin ecosystem,” even though fragmentation is likely to continue. “Existing private stablecoins, CBDCs and regional solutions can continue to work in parallel,” he said.
Year of Work
Duong described Swift’s initiative as a “waterhed moment” for both crypto and traditional finances, but reminded that it was years of labor. The company has been experimenting with ledger shared technology since 2017, Duong said, along with the conduct of pilot projects with Chainlinktokenized securities platforms Clearstream and Setl and interoperability tests in CBDCs. Developing its own Ledger’s shared platform will appear to be the next stage in that long move, Duong said.
However, not everyone can see Swift as a neutral player. Its role in implementing penalties has led to distrust of countries where banks are cut off from the network, Acheson said.
“It is unclear that its offer will stop the destruction of payment systems, given global distrust following Swift’s role in implementing sanctions to us and EU,” he argued.
Although, Swift’s decision emphasizes that the lines between traditional and blockchain finance are increasingly intertwined and the largest financial institution in the world is – slowly, then suddenly – take the initiative to remain relevant.
