Swift has announced that its blockchain-based ledger is ready for early adopter financial institutions to support 24/7 cross-border payments via interoperable tokenised deposits. The pilot represents the first step in what might unfold as the payment network’s response to the emerging threat posed by stablecoins.
In all, 17 banks from six continents are preparing to pilot live ledger transactions, reflecting global demand for the new addition to Swift’s technology stack and its ability to deliver faster, flexible money movement across the world. The banks are: ANZ, BNP Paribas, BNY, Citi, DBS, First Abu Dhabi Bank (FAB)
FirstRand Bank Limited, HSBC, Itaú Unibanco, Lloyds Bank, Mashreq, MUFG Bank, OCBC, Standard Chartered, UBS, UOB and Wells Fargo
The Swift ledger provides participating banks with a secure orchestration layer for bank-issued tokenised deposits on their own ledgers, thus enabling them to move funds for customers at any time. However, actual fund transfers are completed through existing payment mechanisms. Swift currently settles 75% of payments within 10 minutes, with some taking just seconds.
Tokenised bank deposits have become popular as collateral for business transactions because they operate within established regulatory frameworks and contribute to a bank’s balance sheet. Now, using the Swift ledger, these deposits are interoperable so enabling banks to synchronise payment commitments in real time, and laying the groundwork for frictionless cross-border collateral exchange.
Says Thierry Chilosi, Swift’s Chief Business Officer: “With our new ledger capability, we’re extending the trust and stability of established finance into the frontiers of digital money. It allows tokenised value to move across borders with the velocity and flexibility that modern commerce expects, while maintaining the same high levels of resiliency, security, and compliance global finance requires.”
Andreas Kubli, Managing Director, Group Head of Digital Assets at UBS, adds: “We see interoperability as the key enabler for scaling tokenised deposits beyond individual institutions. Swift’s ledger is an important industry initiative that can help connect digital money networks, supporting real-time settlement, greater liquidity mobility and the broader adoption of tokenised payments and digital assets across the global financial ecosystem.”
The Swift ledger orchestration offering runs on a private Linea Layer 2 scaling network for the Ethereum blockchain built by Consensys, a specialist in Ethereum technology. Linea leverages zero-knowledge cryptographic proofs to ensure privacy of transactions, which was likely an attractive feature for Swift.
In addition to Linea, the Swift ledger stack also incorporates Chainlink technology to provide universal interoperability and cross-chain messaging. For example, when a bank triggers a payment transaction via the existing Swift payments network, Chainlink’s Runtime Environment (CRE) and Cross-Chain Interoperability Protocol (CCIP) can intercept this ISO 20022 message, then translate and route it to blockchain-based smart contracts that might execute tokenised deposit transfers.
Strategically, Swift’s ledger could over time be aligned with its payments network of 11,500+ institutions and so become a general mechanism for the exchange of tokenised deposits for banks and their customers. Such a capability would compete with emerging stablecoin networks that seek to bypass Swift for B2B payments.
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