Six global banks have announced their endorsement for the financial cooperative’s new transaction management platform. Preparations are in place to use the platform’s capacities to provide “instant and frictionless end-to-end transaction” management at a global scale.
According to a press release published by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the project will “improve efficiency and reduce costs” once live by November 2022. The payments platform was backed by Bank of China, Bank of New York Mellon, BNP Paribas, Citi, Deutsche Bank, and Standard Chartered.
The news comes at a time when blockchain-based digital ledger technologies and cryptocurrencies have boomed, and can be thought of as SWIFT’s way of placing a bid to catch up with the crypto and blockchain industry’s developments.
“The new capabilities and enhanced platform SWIFT is building will take these advancements to the next level while ensuring interoperability with new payment types, technologies and services.” SWIFT stated in the press release.
While global banks and other well-established financial institutions have been looking into crypto and blockchain technologies for opportunities to hedge against inflation, the current state of regulation for the crypto and blockchain industry is arguably still in its infancy, over a decade since the invention of Bitcoin and the birth of smart contract platforms such as Ethereum.
"It will facilitate further innovation and enable exciting new solutions to end customers along with an improved cross-border experience. Preparations for new services are already underway, and international banks see significant potential in the platform capabilities across both payments and securities processing." SWIFT adds.
According to SWIFT, the new payments platform will feature upfront validation of beneficiary details, central management of exceptions, and an extension of SWIFT’s gpi (global payments innovation) rails. In 2019, SWIFT announced that it will be opening its cross-border payments platform to blockchain platforms, allowing blockchain companies to loop into the gpi rails, thus bridging differing distributed ledgers (DLTs) to the fiat banking sector.
SWIFT’s acceleration of its DLT and gpi rail API integration with existing blockchain technologies is powered by R3, an enterprise software firm developing Corda, a blockchain platform enabling communication between distributed ledgers.
According to SWIFT, the developments for the payments platform will open lower-value payments and new, rich data services based on the ISO 20022 standard. To date, SWIFT connects over 11,000 financial services institutions and 4 billion accounts across 200 countries.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.