The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has been closely monitoring the development of fintech, focusing on its own future. After exploring various projects utilizing new technologies, the cornerstone of the current international payments system has thrown its support behind a unified ledger payment model.
SWIFT specifically examined tokenization and the shared ledger model, as stated in a post on its website. It emphasized that a common infrastructure could provide real-time balance information to all participants in the shared ledger. However, SWIFT was quick to note that messaging is still essential for frictionless transactions. Additional types of data, such as AML, compliance, sanctions screening, trade, and accounts receivable reconciliation, need to be transferred to enable value-added services.
Rather than starting from scratch, SWIFT proposed the creation of a state machine—a dynamic model that reflects the current state of transactions and balances across institutions. This model could be built on the existing ISO-20022 messaging technology already in use. It could be implemented on a blockchain or a centralized platform like SWIFT’s Transaction Manager.
The unified ledger technology has gained acceptance from the International Monetary Fund in its XC platform and from financial institutions participating in the Regulated Liability Network. The Bank for International Settlements has also endorsed this model.
Founded in 1973, SWIFT settled on the unified ledger model after exploring several other options. In 2022, it partnered with fintech Symbiont for a pilot project aimed at enhancing its information delivery to corporate clients through Symbiont’s blockchain-driven Assembly platform.
While SWIFT initially opposed the use of a unified ledger in a 2023 report, favoring SWIFT as a “single point of access” to different blockchain networks, it has since embraced the unified ledger model.
SWIFT holds a crucial role in the enforcement of economic sanctions worldwide. In February 2022, at the onset of the Russian invasion of Ukraine, the European Commission mandated the removal of an unknown number of Russian banks from SWIFT.
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