Swift is testing the use of its existing infrastructure to transfer tokenized value over blockchain networks.
The provider of financial messaging services is working with Web3 services platform Chainlink and more than a dozen financial institutions (FIs) and financial market infrastructures (FMIs) on the test, and their findings will be published later this year, Swift said in a Tuesday (June 6) press release.
The test will include managing and trading assets over public and private blockchain networks and aims to solve the challenge presented by the multitude of networks that are not interoperable and therefore create friction in the handling of assets, according to the release.
“In such a highly fragmented ecosystem, it would simply not be feasible for financial institutions to connect to each and every platform individually,” Swift Chief Innovation Officer Tom Zschach said in the release. “That’s why the community is working with Swift to develop an interoperability model that would enable access to different platforms globally.”
In addition to enabling financial institutions to interact with multiple blockchain networks, Swift’s test will also address the operational, compliance and regulatory issues of using public blockchains, according to the press release.
The aim of the project is to make these interactions as secure and trusted as the current means of trading traditional assets while using blockchain technology to improve efficiencies, costs and opportunities the release said.
“We’re excited to work with Swift,” Chainlink Co-founder Sergey Nazarov said in the release. “It’s clear that as banks endeavor to access multiple blockchains, a common connectivity layer across the various chains will be a critical building block for their adoption of on-chain finance.”
Swift has been testing the waters of the blockchain world as a way of delivering enhanced services to participating institutions.
Last year, it partnered with blockchain FinTech company Symbiont to facilitate the sharing of information about corporate events among institutions in its network.
Swift’s latest partnerships and projects build upon its experience of serving as the primary interbank messaging service for FIs around the world, working with 11,000 member institutions worldwide and facilitating $150 trillion in transactions per year.