Swift to Trial Digital Asset Transactions in 2024

Swift, the global financial messaging giant, will launch live trials of digital asset and currency transactions in 2024, involving financial institutions in North America, Europe, and Asia.

These trials have been long awaited and they mark a major step in integrating digital currencies with traditional banking infrastructures.

The live trials will use Swift’s existing global messaging network, allowing banks to conduct real-world digital asset and currency transactions.

The Belgian fintech giant, first established in 1973, has previously experimented with blockchain in controlled environments, but this pilot will be its most advanced test yet.

Bringing together the digital and traditional

Essentially, the trials will connect digital and fiat currency platforms through Swift’s network, facilitating cross-border transactions.

Swift's Chief Innovation Officer, Tom Zschach, highlighted that these trials are crucial for integrating digital assets into mainstream banking.

He explains: “Global financial institutions will have the ability to use Swift’s global platform to conduct pilot transactions for the settlement of digital assets and currencies.”

The trials will demonstrate how institutions can use their existing Swift connections to transact in both traditional and emerging digital currencies, hopefully bridging the two eras seamlessly.

For the insurtech industry, this presents a chance to observe how digital currencies and traditional systems can coexist. Insurers could eventually streamline cross-border claims and risk management through these advancements.

Swift’s relationship with blockchain

Swift’s decision to move forward with live trials follows a series of blockchain experiments in collaboration with Chainlink, a web3 services firm.

These tests have demonstrated Swift’s ability to connect its network to multiple blockchain platforms, including Ethereum's Sepolia test network.

Tom emphasises Swift’s unique role in bridging these two worlds with its extensive global reach. “For digital assets and currencies to succeed globally, they must seamlessly coexist with traditional forms of money,” he says.

This cross-network connectivity is crucial for supporting the growing interest in tokenised assets and central bank digital currencies (CBDCs).

More than 130 countries are exploring CBDCs and insurtech companies could benefit from tokenisation to streamline contract issuance and claims management via digital ledgers.

Tackling fragmentation in fintech

One of Swift’s primary aims in these trials is to address the fragmentation of digital platforms, which threatens global adoption.

If there were one standardised platform for this action, the universality could deliver huge improvements to digital transactions all around the world.

As more institutions develop their own blockchain and digital currency systems, though, the lack of interoperability remains a key obstacle.

“While the scale is impressive, without interconnectivity between platforms, global adoption is set to remain fragmented,” Tom says.

Linking multiple systems under one framework is essential for the future of digital currencies and it could be a game-changer for insurers who rely on cross-border data flows.

Tom stressed that Swift’s platform will continue evolving to meet the needs of its global community.

He says: “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."

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