Swift plans to test multi-ledger Delivery-versus-Payment (DvP) and Payment-versus-Payment (PvP) transactions on its global platform. This could allow securities buyers to simultaneously pay for and exchange tokenized assets in real-time on Swift’s network.
The new initiative will focus heavily on the global trading of real-world assets (RWA), as the industry is expected to reach a $30 trillion market cap by 2034.
Swift said that the global tokenized asset industry has an interoperability issue, which turns different RWA efforts into digital islands. This is primarily caused by the lack of a globally accepted digital form of money.
Swift Chief Innovation Office Tom Zschach said:
Zschach added that inclusivity and interoperability are central pillars of the financial ecosystem. This effort will initially use fiat currencies and is later planned to evolve into incorporating central bank digital currencies (CBDC), tokenized commercial bank money, and regulated stablecoins.
Notably, Swift said it had achieved successful results in value transfer tests involving tokenized assets, mentioning the two CBDC sandboxes it has conducted, which included banks from Europe, Asia, and North America.
Moreover, Swift’s new foray to provide a single payment infrastructure for tokenized assets also aims to address how to integrate different digital assets with its respective bank-led networks.
Since each financial institution exploring RWA could be using different distributed ledger technologies, the lack of compatibility might hinder global interoperability. Additionally, the divergence in various regulatory environments can also lead to challenges.
The American Bankers Association (ABA) has sharply criticized the Office of the Comptroller of the…
President Donald Trump and his family's cryptocy company, World Liberty Financial (WLFI), are facing a…
Aerodrome Finance and Velodrome, two of the leading decentralized exchanges (DEXs) on Base and Optimism,…
OpenAI's artificial intelligence models helped uncover two critical security vulnerabilities in PHP, the programming language…
SoFi Technologies has launched SoFi Earn (SOFIE), a new blockchain-based banking product that allows consumers…
Microsoft, Google's parent company Alphabet and Goldman Sachs have joined a growing list of major…