YEREVAN (CoinChapter.com) — On September 11, 2024, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) announced its latest move toward integrating tokenized assets and currencies. The global banking network revealed plans to enable its members to access and transact with regulated digital assets. SWIFT aims to combine traditional finance with emerging technologies, allowing financial institutions to handle both traditional and digital assets on its interbank network.
Founded in 1973, SWIFT operates as a cooperative organization owned by its member banks. The platform links over 11,000 members worldwide, providing secure messaging and payment services. The growing influence of digital currencies and tokenized assets has pushed SWIFT to take steps toward integrating blockchain technologies into its operations.
Ethereum Plays Key Role in SWIFT’s Experiments
Matthew Sigel, the head of digital assets research at VanEck, emphasized the connection between SWIFT and Ethereum. He noted that Ethereum is the only blockchain mentioned in SWIFT’s communications regarding its digital asset integration plans. SWIFT’s focus is on developing interoperability between traditional financial systems and blockchain-based assets.
SWIFT has also been working on blockchain experiments, concentrating on interoperability between tokenized assets and central bank digital currencies (CBDCs). The organization is looking for ways to enable transfers of tokenized value across public and private blockchains, which would support the handling of tokenized assets.
Tokenized Asset Market Could Reach $30 Trillion by 2034
According to research from Standard Chartered, the tokenized real-world asset (RWA) market could grow to $30 trillion by 2034. SWIFT’s announcement highlighted this data, reinforcing the rapid growth of tokenized assets in global finance. Institutional investors, with 91% expressing interest in tokenized assets, are exploring ways to incorporate these new assets into their portfolios.
However, the digital asset landscape remains fragmented. With different platforms, technologies, and regulatory requirements, institutional investors face complexity when dealing with multiple tokenization systems. SWIFT’s solution involves evolving its infrastructure to support real-time transactions and streamline tokenized asset transfers.
Successful Blockchain Interoperability Testing
SWIFT’s blockchain interoperability tests have already yielded promising results. The organization’s experiments demonstrated how tokenized value could be transferred across both public and private blockchains. In September 2023, SWIFT conducted a key experiment using Chainlink’s Cross-Chain Interoperability Protocol (CCIP) in collaboration with several financial institutions. This experiment showed that SWIFT’s infrastructure can integrate with various blockchain networks.
As it continues developing these solutions, SWIFT plans to initially process payments using existing fiat currencies. Over time, it intends to support transactions with tokenized forms of money, such as CBDCs, regulated stablecoins, and tokenized commercial bank money.
SWIFT’s digital asset integration is expected to benefit the underlying infrastructure, especially blockchain networks like Ethereum and Chainlink. However, decentralized digital assets such as Bitcoin or Ethereum will not likely be directly transferred via SWIFT. Instead, the focus will be on regulated and tokenized money.
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