Global messaging hub Swift has spent decades building a global system for cross-border payments, and now it plans to launch a blockchain-based solution incorporating digital assets.
In collaboration with roughly 30 global financial institutions, Swift is developing a shared digital ledger designed to be interoperable with existing blockchains, including those supporting stablecoins, tokenized deposits, and central bank digital currency (CBDC) transactions.
The platform is envisioned as a secure, real-time record of bank transactions, leveraging smart contracts to enforce compliance. Its ultimate goal is to enable real-time cross-border payments.
Checks and Balances
The costs and inefficiencies of cross-border payments have long been a challenge—one of the key reasons Swift has achieved such a strong global presence. The organization has built a network that connects over 11,000 banks across 200 countries.
By providing a critical layer of communication, Swift helps streamline a cross-border payments model that has traditionally depended on manual checks and balances. While Swift has improved the correspondent banking system, persistent challenges remain. Regulatory nuances, currency conversions, and compliance requirements continue to drive up costs, cause delays, and heighten fraud risks.
A Stronger Solution
Due to these issues, digital assets are increasingly seen as a stronger solution for international transactions. Among them, fiat-based stablecoins have emerged as the leading contender, since most cryptocurrencies are highly volatile, while CBDCs and tokenized deposits have yet to gain meaningful traction .
Blockchain-based stablecoins enable secure transactions, and their decentralized infrastructure allows payments to be sent globally in real time. Another key differentiator is that they don’t require a bank account—unlike many cross-border networks, including Swift’s.
Although Swift’s network is designed to connect with—rather than compete against—stablecoins and existing blockchains, the cross-border payments landscape is becoming increasingly crowded.
For example, PayPal and Circle now offer both stablecoins and cross-border payments networks that connect financial services firms. Additionally, Visa and Mastercard have launched substantial cross-border payments networks that leverage their global presence.
Many banks are also developing their own digital assets solutions with potential cross-border capabilities. This includes JPMorgan Chase, which has considered issuing its own stablecoin and has launched a digital assets division under its Kinexys brand.
Despite this growing competition, Swift hopes to leverage its established network to maintain a prominent role in the ecosystem. The organization is also relying on its many partner banks to drive continued innovation. For example, several banks collaborating on its new blockchain-based system include HSBC, Deutsche Bank, and JPMorgan Chase.
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