Swift, the global messaging network for international payments, has shared key findings from its recent experiments on blockchain compatibility.
Working alongside major financial institutions and Chainlink, Swift set out to showcase its potential as a central hub for facilitating the transfer of tokenized assets across different blockchains.
The trial also roped in leading financial entities, including ANZ, BNP Paribas, and Citi, among others.
Chainlink securely connected the Swift network and Ethereum’s Sepolia testnet via the oracle’s Cross-Chain Interoperability Protocol (CCIP).
The study reveals that 97% of institutional investors foresee asset management being revolutionized by tokenization.
Tokenization can boost efficiency, cut costs, and expand investor involvement via fractional ownership.
Yet, the growing array of blockchains housing these tokenized assets poses a substantial obstacle. Financial institutions are compelled to connect with each distinct blockchain, leading to mounting operational challenges and expenses.
Swift’s experiments sought to remove this bottleneck. By offering a single, secure point of access to multiple blockchain networks, they can significantly mitigate the operational challenges facing institutions. Its infrastructure could serve as the backbone for the global scaling of tokenized asset markets.
Swift’s work also aimed at comprehending the intricate aspects of data privacy, governance, operational risks, and legal responsibilities.
The trials encompassed the movement of simulated tokenized assets within a single public distributed ledger technology (DLT) network, between distinct public blockchains, and from public to private networks.
Tom Zschach, Swift’s chief innovation officer (CIO), stressed the importance of interoperability in their approach. He explained that their infrastructure could eliminate major obstacles, thereby unlocking the complete potential of tokenization.
“It’s now clear that both top global banks and leading market infrastructures believe there will be greater adoption of digital assets across the entire banking industry, and that this adoption will happen using multiple different blockchain technologies at the same time.”
Sergey Nazarov, co-founder at Chainlink
Swift intends to continue its collaborative approach to identify compelling use cases for tokenized assets, particularly focusing on secondary trading of non-listed assets and private markets.