SWIFT and Chainlink Have Partnered to Integrate Blockchain Technology Into Banking Services
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Swift is partnering with banks and Chainlink to test the integration of public and private blockchains. SWIFT is the financial messaging system driving most monetary and securities transfers.
In a significant move towards blockchain integration in global banking, SWIFT, the international financial messaging service, has partnered with major banks and Chainlink, a web3 infrastructure provider. They aim to test the interconnection of public and private blockchains in a collaborative trial project.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT), whose systems facilitate most worldwide monetary and securities transfers, initiated this project to extend its previous blockchain interoperability endeavors. SWIFT began these efforts in 2022, examining the function of private blockchains and tokenized assets in the finance sector.
Chainlink’s Cross-Chain Interoperability Protocol (CCIP) has been selected by SWIFT to aid in achieving this objective. Jonathan Ehrenfeld, SWIFT’s head of securities strategy, suggests the decision reflects a growing institutional interest. Institutions want to meet customer needs through permissioned and public blockchain networks like Ethereum.
Chainlink’s role involves providing an “enterprise account abstraction layer”, signifying the wide-scale acceptance of asset tokenization in the banking and financial market infrastructure. Sergey Nazarov, Chainlink’s co-founder, believes this trend could expand the blockchain industry tenfold. He touted CCIP as a “universal messaging interface” for inter-blockchain communications, giving it a unique advantage in interfacing with private blockchains.
CCIP, which uses the same security model as Chainlink’s oracle network, has managed over seven trillion dollars in value. SWIFT aims to harness this power to optimize existing banking systems.
Tom Zschach, SWIFT’s Chief Innovation Officer, sees a multi-chain future and views Chainlink as a path to cost-effective global bank integration.
This proof-of-concept is planned to demonstrate the feasibility of interoperability across public and private networks. It involves a bank issuing a security token on a private chain using CCIP, which then gets transferred to a custodian’s chain. Subsequently, a third bank can purchase the tokenized security and transfer it to its private chain.
This initiative aims to refine various securities for public chains. It builds on the growing agreement that digital assets are a lasting fixture in finance. Nazarov compared this shift to the evolution of separate networks into the single entity of the internet.
This collaboration marks a major step forward in the use of blockchain technology in global banking. Public and private blockchains could transform financial systems. They can increase efficiency, transparency, and security. The financial world waits for this trial project’s outcomes. These could lead to a more connected, blockchain-driven future.
- SWIFT, a Belgium-based financial messaging system, is piloting a blockchain-backed project. The project aims to make communication of corporate events easier by introducing divided payments and mergers. SWIFT will use Symbiont’s platform, Assembly, along with the company’s blockchain capabilities and smart contracts.
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