SWIFT has announced plans to add a blockchain-based shared ledger to its technology infrastructure as remittance competition with Ripple intensifies.
In a press release on 29 September, the company said the step will enable it to facilitate instant, always-on cross-border transactions at unprecedented scale.
The leading remittance provider is building the blockchain layer in partnership with Consensys, the company behind Ethereum.
More than 30 banks involved
SWIFT has already started working on building the ledger with support from more than 30 financial institutions around the world.
Consensys will however provide a conceptual prototype for the first use case of real-time 24/7 cross-border payments in phase one of the project.
Swift CEO Javier Pérez-Tasso announced the ledger at Swift’s annual flagship Sibos conference in Frankfurt, saying,:
“We provide powerful and effective rails today and are moving at a rapid pace with our community to create the infrastructure stack of the future. Through this initial ledger concept we are paving the way for financial institutions to take the payments experience to the next level with Swift’s proven and trusted platform at the centre of the industry’s digital transformation.”
By adding the blockchain layer, SWIFT will extend its influence into the digital space which will empower it to facilitate banks’ trusted and scalable movement of regulated tokenised value across digital ecosystems.
The company will focus primarily on commercial and central banks, helping them to complement and make use of the new blockchain infrastructure.
An interoperable blockchain
Like every blockchain ledger, SWIFT’s infrastructure will record, sequence and validate transactions between financial transactions and enforce rules through smart contracts.
The ledger will also be interoperable, with the ability to work with current and future networks seamlessly.
This decision is coming as Ripple positions itself as a superior alternative for cross-border remittance which the U.S. is said to be considering as a replacement for SWIFT’s slower, more expensive platform.
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