Swift, a global financial services firm that is relied upon by more than 11,500 financial services organizations around the world, has announced a successful blockchain test deemed to show the potential for tokenized assets in the future.
According to a statement by Swift, an experiment completed in partnership with Chainlink indicates that value transfer across multiple public and private blockchains can remove significant friction while enabling tokenization on a global scale.
Noting that tokenization remains in its infancy, Swift says that 97% of institutional investors believe digital assets will “revolutionize asset management” because of the improved efficiency and cost reductions. This includes fractional ownership of assets that will enable broader access for investors.
Tom Zschach, Chief Innovation Officer at Swift, said that interoperability is key to everything they do at Swift. For tokenization to achieve its full potential, institutions must connect seamlessly to the entire financial ecosystem.
“Our experiments have demonstrated clearly that existing secure and trusted Swift infrastructure can provide that central point of connectivity, removing a huge hurdle in the development of tokenization and unlocking its potential.”
A key hurdle for mass digital asset adoption is the wide variety of blockchain networks currently available. Being able to work with all distributed ledger technologies will accelerate the adoption of tokenization.
Chainlink co-founder and CEO Sergey Nazarov, said that it is clear that both top global banks and leading market infrastructures believe there will be greater adoption of digital assets across the entire banking industry. He added that the project with Swift proved that interoperability across chains is critical to enabling the next stage of digital asset adoption across the global financial system.
“When combining Swift and CCIP, we were able to show that this new level of interoperability across various blockchains is now possible with minimal resources from even the largest banks and market infrastructures.”
Swift reported that it worked with over a dozen major financial services firms along with Chainlink to successfully demonstrate that it can provide a single point of access for multiple blockchain networks while providing a fast and secure transaction at an enterprise level.
The test partners for the blockchain project included Australia and New Zealand Banking Group Limited (ANZ), BNP Paribas, BNY Mellon, Citi, Clearstream, Euroclear, Lloyds Banking Group, SIX Digital Exchange (SDX) and The Depository Trust & Clearing Corporation.
Chainlink was used as an enterprise abstraction layer to securely connect the Swift network to the Ethereum Sepolia network, while Chainlink’s Cross-Chain Interoperability Protocol (CCIP) enabled complete interoperability between the source and destination blockchains.
Swift said the project is part of a broader strategy to “ensure secure, global interoperability as new technologies and platforms emerge.”
The Head of Digital Securities at SIX Digital Exchange, Alexandre Kech, said the exercise was critical to understanding how banks and FMIs can realize the promise of blockchain for institutional business. This includes building regulated global digital asset agnostic trading, settlement, and asset servicing 24/7 infrastructure for issuers and investors.
In business for many decades, Swift has been a vital variable in the global financial community. To maintain its relevance, it must keep pace with Fintech innovation, and tokenization may be the path for its future operations. Swift noted that it is also preparing to support Central Bank Digital Currencies (CBDCs) if they enter the ecosystem.