Citi and Swift Claim Fiat/Digital Currency PvP Success

Following what the organisations term a “landmark trial”, Citi and Swift say they have proven the feasibility of settling payments between fiat and digital currencies in a payment-versus-payment (PvP) window, thus providing “a powerful hybrid model for interoperability between traditional financial systems and Distributed Ledger Technology (DLT) networks”.

Citi and Swift designed a holistic messaging standard capable of tracking the end-to-end process, from trade initiation to settlement confirmation. They say the standard uniquely accounts for the distinct data fields and characteristics inherent in fiat-digital currency transactions. The solution also incorporated an escrow mechanism to overcome the challenge of irreversible blockchain transactions, while ensuring PvP settlement and eliminating settlement risk of both parties.

A central orchestrator further managed the sequenced exchange of messages, coordinating between the fiat and DLT legs to ensure synchronisation and finality. In the trial, Citi also utilised test USDC tokens from Circle on the Ethereum Sepolia testnet, to simulate a near-production environment.

“These trials with Swift represent a significant leap forward in understanding and developing infrastructure required to support digital currency transactions,” says Ayesa Latif, head of FX products at Citi. “Our collaboration has demonstrated how existing financial systems can be enhanced with blockchain technology to unlock new levels of speed, transparency, and risk reduction in cross-currency settlements.”

Jonathan Ehrenfeld, head of strategy at Swift, adds, “Swift is uniquely positioned to be the secure and trusted single point of access for seamless connection between the tokenised ecosystems and the established global financial community. This collaboration with Citi proves that we can leverage the reach of our existing network while introducing advanced capabilities required to orchestrate fiat-digital currency PvP.”

The two organisations say they will continue to refine the approach in collaboration with the broader financial community and establish the messaging and operational standards necessary for scalable, institutional-grade digital asset transactions.