Global banking co-operative Swift is advancing its plans to provide member banks with access to emerging digital asset classes and currencies through its network, addressing various use cases in payments, securities, foreign exchange, trade, and more.
Swift has dedicated the past couple of years to running trials aimed at testing interoperability with Central Bank Digital Currencies (CBDCs), private blockchain networks, and tokenized assets. The Brussels-based messaging network indicates that it is now prepared to move toward real-world solutions that can interconnect diverse forms of digital assets and currencies. This includes plans to test the enablement of multi-ledger Delivery-versus-Payment (DvP) and Payment-versus-Payment (PvP) transactions on its network.
According to Swift, “Without a globally accepted digital form of money, the cash leg in the execution of DvP settlement is particularly challenging.” As a result, Swift is exploring ways to link tokenized asset settlement with the corresponding payment transfers occurring on its network. Initially, these payment transactions will utilize existing fiat currencies, with future capabilities planned to include tokenized forms of money, such as CBDCs, tokenized commercial bank money, or regulated stablecoins.
Additionally, Swift is testing how its interlinking capabilities could facilitate connections between emerging bank-led networks, such as the US Regulated Settlement Network, and other financial infrastructures.
The next steps for Swift involve developing technical standards and examining the implications of implementation for workflows, standards, and market practice requirements necessary to achieve scalability.