๐ Overview:-
โข Initiative:
SWIFT, the global financial messaging network, is developing its own blockchain platform to modernize cross-border transactions.
โข Objective:
To facilitate tokenized product payments, including stablecoins, via a digital ledger.
๐๏ธ Key Collaborations:-
โข Bank Partnerships:
Collaborating with major banks such as Bank of America, Citigroup, and NatWest.
โข Blockchain Partnership:
Partnering with blockchain company ConsenSys to build and test the platform.
๐ Technological Features:-
โข Smart Contracts:
Utilizing smart contracts to record, sequence, and validate transactions.
โข Instant Payments:
Aiming to provide instantaneous, always-on payments at a global scale.
โ๏ธ Strategic Context:-
โข Market Competition:
The move comes amid growing competition between mainstream banks and the cryptocurrency industry, which offers quicker, intermediary-free transactions.
โข Regulatory Influence:
Policy developments, including recent U.S. stablecoin regulations, have prompted traditional banks like JPMorgan and Citi to explore launching their own tokens.
๐ Industry Implications:-
โข Legacy Systems:
Acknowledging that SWIFT legacy systems are less efficient compared to blockchain alternatives.
โข Global Reach:
SWIFT serves over 11,500 global institutions, aiming to improve transaction transparency, costs, and speed.
๐ฎ Future Outlook:-
โข Euro Stablecoin:
In parallel, a consortium of nine European banks plans to release a euro-denominated stablecoin by late 2026.
โข CBDC Integration:
SWIFT is also planning a new platform to connect central bank digital currencies (CBDCs) to the existing financial system within the next 12-24 months.
#SWIFT #CBDC #ConsenSys
#Blockchain #CrossBorderPayments
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