SWIFT or the Society for Worldwide Interbank Financial Telecommunication, and Chainlink, a provider of real-world data to blockchains, have announced a collaboration with numerous financial institutions to explore the integration of blockchain networks. The partnership aims to test the seamless transfer of tokenized assets across different blockchains using Swift’s infrastructure, according to a press release.
Among the major traditional financial (TradFi) institutions participating in the experiments are the Depository Trust and Clearing Operation (DTCC), ANZ, BNP Paribas, BNY Mellon, Citi, Clearstream, Euroclear, and Lloyds Banking Group. Chainlink will play a crucial role in providing connectivity across both public and private blockchains for these tests.
SWIFT highlighted the potential benefits of blockchain technology in capital markets, emphasizing that it could generate efficiencies, reduce costs, and simplify settlement processes. By attracting more investors to private markets and increasing liquidity, blockchain adoption could reshape the financial landscape. This collaboration not only benefits financial institutions but also marks a significant milestone for the crypto industry as a whole.
Sergey Nazarov, the co-founder of Chainlink, expressed the importance of banks’ involvement in driving the blockchain industry’s growth. He believes that the industry needs the participation of banks and their clients to surpass the $10 trillion milestone. Currently, the crypto market cap stands at $1.08 trillion, indicating substantial room for expansion.
The partnership between SWIFT and Chainlink holds great promise in addressing one of the major challenges faced by Swift—speeding up money transfers. By leveraging distributed ledger technology, blockchain-based technologies, and central bank digital currencies (CBDCs), Swift aims to facilitate faster payments and enhance the efficiency of its services.
The ongoing “proof-of-concept” project, utilizing Chainlink’s Cross-Chain Interoperability Protocol (CCIP), enables Swift to conduct token transfers across various blockchains. Nazarov believes that this initiative will significantly boost the adoption of DLT blockchains across capital markets and traditional finance, allowing banks associated with Swift to access blockchain capabilities without the need for extensive integration or system development.
Additionally, SWIFT has been actively exploring other blockchain initiatives to provide financial institutions with accurate and real-time data. One such collaboration is with fintech startup Symbiont, which involves companies like Northern Trust, Citigroup, American Century Investments, and Vanguard. By leveraging Symbiont’s Assembly platform and smart contracts, Swift aims to distribute data to clients of global custody in near real-time, utilizing its extensive network of over 11,000 institutions.
The collaborative efforts between SWIFT, Chainlink, and other blockchain ventures demonstrate a growing recognition within the financial sector of the potential benefits offered by blockchain technology. As traditional institutions embrace these innovations, the adoption of blockchain and DLT in global finance is expected to accelerate, paving the way for a more efficient and interconnected financial ecosystem.
The impact of this collaboration extends beyond the financial sector. It serves as a testament to the increasing integration of crypto and blockchain technologies with traditional finance, bridging the gap between the two worlds. The participation of major financial institutions in blockchain experiments signifies a growing interest in digital assets and their potential to transform the global financial landscape.
As the financial industry continues to embrace blockchain and DLT solutions, it is poised to undergo significant transformation, with increased efficiency, reduced costs, and improved accessibility. The partnership between Swift and Chainlink signals an important step towards a future where blockchain technology becomes an integral part of traditional finance, unlocking new possibilities and driving widespread adoption on a global scale.
Note: Some information in this article is courtesy of Todayq news.