In a significant move to modernize global finance, SWIFT has announced it is developing a blockchain-based shared ledger in collaboration with over 30 major financial institutions and technology partner Consensys. This initiative, unveiled at the Sibos conference in Frankfurt, aims to make cross-border payments instantaneous and available 24 hours a day, seven days a week.
Context and Impact of the Ledger
The core goal of this project is to create a shared digital ledger that will act as a secure, real-time log of transactions between financial institutions. This ledger will use smart contracts to record, sequence, and validate transactions automatically, enforcing pre-set rules and ensuring compliance at every step.
This technological leap is designed to address the current limitations of cross-border payments, which can take days and involve higher costs. By moving towards a system of instant, always-on transactions, SWIFT aims to significantly shorten settlement times and lower fees. Furthermore, the system is being designed for interoperability, ensuring it can work seamlessly with the new financial ecosystems emerging around stablecoins, tokenized bank deposits, and Central Bank Digital Currencies (CBDCs).
Implications
The implications of this development are vast for the future of global finance. The initiative could accelerate the adoption of tokenized assets and reduce the complex costs associated with correspondent banking.
For corporate treasurers, this could open up new, efficient ways to manage settlements and tokenized balances. SWIFT CEO Javier Pérez-Tasso emphasized that this move is about bringing Swift’s proven trust and platform to the center of the industry’s digital transformation.
However, several key hurdles remain. The design must gain acceptance from global regulators, the network must prove it can scale effectively, and the underlying code must maintain robust security. As noted in reports, the effort is also a strategic response to avoid being made obsolete by digital assets, ensuring that SWIFT evolves while maintaining the risk controls and compliance features that traditional banks require.
Participants and Next Steps
The project is a collaborative effort with a consortium of more than 30 leading global financial institutions. Participants confirmed in the announcements include JPMorgan, HSBC, Deutsche Bank, Bank of America, BNP Paribas, Santander, and MUFG, among others from the Middle East and Africa.
The technology partner for the initial phase is Consensys, which will build the first conceptual prototype based on its Ethereum expertise.
The next step is to develop this prototype with Consensys. While the work is progressing “at pace” a definitive launch date for the live system has not yet been set. The financial community is advised to watch for updates on interoperability tests and the ongoing regulatory rule-making that will ultimately decide the ledger’s path to going live.
