- SWIFT teams up with Consensys to build a blockchain system for real-time cross-border bank payments.
- The new blockchain platform will support tokenized asset transactions between global financial institutions.
- SWIFT plans to test blockchain features with over 30 banks to improve payment speed and reduce transaction delays.
SWIFT is collaborating with Consensys and 30+ financial institutions to develop a blockchain-based settlement system. The program is designed to facilitate cross-border payments among banks across the world in real time and 24/7.
The move comes as the financial industry shifts toward faster digital payment systems. SWIFT’s project focuses on creating a secure ledger for transactions among institutions.
The new system will not move funds directly. Instead, it will serve as a communication layer between banks to validate and record transactions on-chain. SWIFT’s goal is to support tokenized asset exchanges while maintaining compliance with regulatory frameworks.
Testing Begins With Ethereum Layer-2 Network
The project’s first phase involves building a prototype in collaboration with Consensys. The prototype is being tested on Ethereum’s layer-2 network, Linea. Earlier this year, Consensys talked with sovereign funds and banks to build infrastructure on Ethereum and boost its role in global finance.
SWIFT intends to support different types of digital tokens. However, the final decision will rest with central and commercial banks. The infrastructure must remain interoperable with existing financial systems and emerging networks.
Consensys will define future phases of the project based on testing outcomes. The blockchain will work alongside SWIFT’s messaging layer to synchronize data securely and efficiently.
Legacy Systems Compete With Stablecoin Growth
The rise of stablecoins has increased pressure on legacy banking systems. The blockchain technology is able to provide cost-effective and quicker payments.
Traditional cross-border transactions often take days. Blockchain networks can complete the same processes in minutes. This efficiency makes stablecoins appealing for institutions seeking faster settlements.
In response, SWIFT aims to reduce its reliance on traditional rails. The organization plans to use smart contracts and tokenized assets to streamline operations. Some industry observers see this as an effort to compete with stablecoin providers.
Banks Explore Blockchain for Settlements
Banks, including Bank of America, Citigroup, and NatWest, are expected to take part in SWIFT’s tests. They will help evaluate how the blockchain can process transactions for tokenized products, including stablecoins.
Previous trials in 2024 showed progress. SWIFT worked with UBS and Chainlink under Singapore’s Project Guardian. The tests linked tokenized funds with fiat payments using the global messaging network. SWIFT also partnered with major banks to test its core messaging system on the Linea blockchain, aiming to improve global payments.
More recently, Qatar National Bank joined a separate blockchain project using JP Morgan’s Kinexys platform. That system offers faster USD payments and 24/7 availability.
The SWIFT-led initiative could bring similar speed and efficiency across its network of 11,500 institutions in over 200 countries.
