Standard Chartered and HSBC Complete First Transaction on Swift Blockchain Ledger

Standard Chartered and HSBC have completed the first interbank transaction executed on Swift’s blockchain-based ledger, Standard Chartered said in a Wednesday (Aug. 19) press release.

This live cross-border transaction demonstrated interbank operability and helped advance industry progress on 24/7 cross-border payments, according to the release.

By doing so, it marked a milestone in the use of tokenized deposits by regulated financial institutions to issue, transfer, record and settle tokenized deposits through Swift’s blockchain-based ledger, the release said.

During the transaction, HSBC and Standard Chartered used Swift’s ledger to exchange payment messages. The resulting obligations were recorded as tokenized deposit obligations on both HSBC’s Tokenised Deposit Service (TDS) and Standard Chartered’s tokenized-deposit infrastructure, and, with Swift’s blockchain-based ledger acting as a secure orchestration layer, the obligations were matched and netted between the two banks prior to final settlement through existing systems, per the release.

Lewis Sun, head of digital currencies at HSBC, said in the release that the transaction demonstrates how digital money issued by banks can be interoperable across institutions while maintaining integrity and regulatory oversight as well as how different infrastructures can be brought together to benefit clients.

“For corporates, this is about solving real-world challenges, such as moving liquidity around the world, across financial institutions, increasing cash visibility and reducing the complexities sometimes associated with traditional cross-border transactions,” Sun said.

Mark Willis, head of emerging payments, transaction services and digital assets at Standard Chartered, said in the release that tokenized deposits are a key part of the company’s digital asset strategy that aims to help clients transact, settle and manage tokenized liquidity and value across borders.

“As institutional demand grows for faster, more efficient ways to move liquidity and optimize working capital increase, interoperable tokenized deposits will play an increasingly important role in helping corporate and institutional clients manage treasury, unlock operational efficiencies and support real time liquidity management across markets,” Willis said.

Swift announced in July that its blockchain-based ledger was ready for use and that 17 banks were preparing live pilot transactions on the ledger.

Thierry Chilosi, Swift’s chief business officer, said at the time in a press release: “With our new ledger capability, we’re extending the trust and stability of established finance into the frontiers of digital money.”