Swift, the backbone of the global economic messaging system, taking a step towards becoming a full blockchain infrastructure provider.
This week, the network revealed plans to build a shared head box platform that will have the banks run transactions involving stableecoins and tokenized assets across multiple blockchains.
While Swift has long served as the message layer for cross -border money movement, the new platform would put it closer to the center of value transfer.
It is a major shift for a more than 50 -year -old traditional financial organization, which is known for dealing with communication between more than 11,500 banks, not for moving money itself.
Swift’s changing role
“The big development is Swift’s changing business model to tackle Blockchain -DisinterMediation,” said Noelle Acheson, author of the Crypto is macro now Newsletter. “Swift, today, does not transfer value; it sends messages. Onchain, the message and the transfer are the same thing.
Acheson argued that the new platform could serve as a “switching” layer for digital currencies and tokenized assets that brodged otherwise siled systems. However, she questioned whether Swift is still important in a world of programmable money.
“Is fast needed in a tokenized financial system? No, it’s not – but it has connections with almost all global banks,” she said.
Onboarding banks to stableecoins
These connections could give Swift an edge when the banks look for a path into the blockchain economy.
“The industry is moving at a fast pace, and stableecoins are adopted globally at such a speed that traditional banks have to take notice,” said Barry O’Sullivan, director of banking and payments in Openpayd.
Swift said that over 30 financial institutions are already engaged in the project. O’SUllivan expects more to follow as demand and the legislative increase in clarity. “The adoption, interoperability and regulatory adaptation will take time,” he said. “Swift, however, is clear to place itself to play a meaningful role in the design of the evolving stableecoin and the tokenized active ecosystem.”
Swift’s platform could also “materially lower” technical barriers and integration costs for financial institutions that want to integrate stablecoins into their operations, said David Duong, head of institutional research at Coinbase.
O’SUllivan noted that the platform could bring “some standardization to the global stableecoin ecosystem”, although fragmentation is likely to continue. “Existing private stableecoins, CBDCs and regional solutions can continue to operate in parallel,” he said.
Years in creation
Duong described Swift’s initiative as a “waters” for both crypto and traditional funding, but recalled that it has been years in creation. The company has been experimenting with distributed headbox technology since 2017, Duong said, including the implementation of pilot projects with chainlink, tokenized securities platforms Clearstream and Setl and Interoperability Tests with CBDCs. Developing its own shared head box platform seems to be the next phase of the long -lasting transition, Duong said.
Still, not everyone can see Swift as a neutral player. Its role in enforcing sanctions has led to distrust in countries where banks were cut off from the network, Acheson said.
“It is not clear that its offer would stop the payment system fragmentation considering global mistrust after Swift’s role in enforcing us and the EU sanctions,” she argued.
Nevertheless, Swift’s decision emphasizes that the lines between traditional and blockchain financing are increasingly being intertwined and the world’s largest financial institutions are – slowly, so suddenly – taking the initiative to remain relevant.
