Global payments operator SWIFT has announced the launch of an ambitious project to test real-time transactions with digital currencies. The pilot, scheduled for 2025, marks a significant step towards integrating cryptocurrency assets into the traditional financial system.
Nick Kerigan, SWIFT’s head of innovation, emphasized that one of the key objectives of the project is to solve the problem of «digital islands.» This problem occurs when assets created on different crypto platforms cannot interact within a single settlement space, which leads to the formation of isolated systems.
«SWIFT is committed to promoting interoperability by allowing various blockchain platforms to seamlessly integrate with traditional financial networks,» Kerigan said. «We intend to prevent fragmentation, which has already occurred after banks like JPMorgan Chase and CitiGroup launched their own blockchain systems for interbank settlements.»
Integrating cryptocurrencies into the global financial system
SWIFT aims to create a solution that will enable seamless interoperability between different cryptocurrencies, regardless of their origin and underlying technology. This will allow digital assets to be seamlessly integrated into the existing financial infrastructure.
The pilot will provide financial institutions with the opportunity to participate in real-life trials of digital asset transactions on the SWIFT network. This could be a key step towards the widespread adoption of cryptocurrencies in the traditional banking sector.
Competition in the interbank settlement market
SWIFT’s initiative comes at a time when competition in the interbank settlement market is intensifying. Recently, US-based cryptocurrency payment infrastructure company Ripple received permission to operate in the United Arab Emirates (UAE) from the Dubai Financial Services Authority (DFSA).
The approval will allow Ripple to offer cross-border payment services in the UAE, including Ripple Payments Direct (RPD), which could potentially compete with SWIFT in the interbank payments market.