SWIFT, the global bank messaging network, announced that banks across North America, Europe, and Asia will begin live trials of digital assets and currency transactions over its network starting next year, according to an Oct. 3 statement.
These trials will explore how financial institutions can leverage their existing SWIFT connections to process transactions involving both traditional and digital assets.
‘Digital islands’
SWIFT pointed out that institutional interest in digital assets is rapidly growing, with 134 countries exploring CBDCs. The tokenized asset market could reach $30 trillion by 2034, and 91% of institutional investors have shown interest in it.
SWIFT aims to demonstrate how its network can ease connectivity challenges between digital platforms, which remain a major barrier to broader sector adoption. The company highlighted that the trials will focus on streamlining connections between disparate digital systems, often referred to as “digital islands,” which hinder the seamless use of digital assets.
Tom Zschach, SWIFT’s Chief Innovation Officer, emphasized the importance of integrating both digital and traditional assets, stating:
“As new forms of value emerge, our intention is to continue offering our community the ability to seamlessly make and track transactions of all kinds of assets – using the same secure and resilient infrastructure that is integral to their operations today.”
To support these efforts, SWIFT plans to enhance its infrastructure, developing an advanced system capable of managing digital asset and currency transactions across various networks. This follows the company’s previous work in linking public and private blockchains, as well as its efforts to connect Central Bank Digital Currencies (CBDCs) and integrate other digital assets.
Already, the Hong Kong Monetary Authority (HKMA) and Banque de France are collaborating with SWIFT in preparation for next year’s trials. They are exploring SWIFT’s capabilities in foreign exchange experiments as part of the European Central Bank’s initiative to advance new technologies for wholesale payments.
SWIFT is also examining how its interlinking capabilities could connect emerging bank-led networks, like the US Regulated Settlement Network, to traditional financial systems.
Additionally, the company has joined Project Agora, a Bank for International Settlements-led initiative. This project focuses on integrating tokenized commercial bank deposits and tokenized wholesale CBDCs on a unified platform.
Posted In: Technology, Web3
For more trending news articles like this, check out DeFi Daily News
Conclusion
As the financial world continues to evolve and embrace new technologies, the integration of digital assets into traditional banking systems becomes more vital than ever. SWIFT’s upcoming trials of digital asset transactions signify a significant step towards bridging the gap between the two worlds and streamlining the process for financial institutions.
With the rise of CBDCs and the forecasted growth of the tokenized asset market, it is clear that digital assets are here to stay. SWIFT’s commitment to enhancing its infrastructure and capabilities demonstrates its readiness to adapt to the changing landscape and provide valuable services to its community.
By connecting digital platforms and traditional financial systems, SWIFT is paving the way for a more seamless and efficient experience in handling various forms of assets. The collaboration with institutions like the HKMA and Banque de France further solidifies SWIFT’s position as a key player in the integration of digital assets into the global financial ecosystem.
Overall, the future looks bright for digital assets, with SWIFT leading the way in ensuring a smooth transition towards a more interconnected and digitally-driven financial world.
:max_bytes(150000):strip_icc()/Health-GettyImages-1870216238-bfdf23f63266469a80ea9b54261ae4e7.jpg?w=120&resize=120,86&ssl=1 "rewrite this title 4 Simple Exercises To Ease Vertigo Symptoms")
