Swift Launches Ledger For 24/7 Cross-Border Payments In “Significant Step”

Swift has unveiled a 24/7 blockchain-based settlement platform that will enable cross-border payments using tokenised deposits in a major step towards resolving existing interoperability hurdles. The initiative is supported by 17 banks that are gearing up to piloting the ledger with live transactions.

Swift said the ledger will unlock faster and more flexible money movement around the world and it’ll provide member banks with a secure orchestration layer for bank-issued tokenised deposits. This will allow them to send customer funds overnight and at the weekend as well, before completing final settlement through existing systems.

The ledge was first announced nine months ago and it promises banks the ability to provide better client experiences, improve global liquidity efficiency without compromising credit, risk and controls that exist in traditional payment systems.

HSBC’s head of digital asset research and senior FX strategist, Daragh Maher, said the move is a “significant step” towards solving the prominent interoperability problem that constrains banks’ ability to scale tokenised deposits. 

“The tokenised deposit of one bank is not fungible with that of another bank and so the respective tokenised deposit services work only within a given bank’s ecosystem. While this does not make tokenised deposits natively interoperable, it represents a live test of whether a common orchestration layer can enable interoperability without requiring banks to adopt a common ledger or token standard,” Maher said in a note.

The live phase will see at least 75 percent of payments on the network reaching beneficiary banks within 10 minutes, and often in seconds, and the cooperative is going even further to advance the industry to meet the G20 targets for international transactions.

“With its community, Swift is implementing a retail payments framework that ensures upfront transparency on fees, full value delivery and a faster, more consistent experience for consumers. Together with the ledger, the upgrades provide a strong foundation for the future that will enable value to move in any regulated form, anywhere, with the highest levels of security and resilience,” Swift said.

Banks that will pilot initial live transactions on the ledger include: ANZ, BNP Paribas, BNY, Citi, DBS, First Abu Dhabi Bank, FirstRand Bank, HSBC, Itaú Unibanco, Lloyds Bank, Mashreq, MUFG Bank, OCBC, Standard Chartered, UBS, UOB and Wells Fargo.