SWIFT to Begin Bank Trials of Digital Asset Transactions in 2025

Society for Worldwide Interbank Financial Telecommunication (SWIFT) announced on Thursday that banks in North America, Europe, and Asia will begin live trials of digital asset transactions on its network by 2025.

Exciting news! Starting next year, financial institutions from around the world will start trialling live digital asset and currency transactions on the Swift network.

This marks an important milestone in our journey to enable banks to transact interchangeably across both… pic.twitter.com/70BxOMoBpT

— Swift (@swiftcommunity) October 3, 2024

The trials will test the effectiveness of using digital assets for various financial transactions across different ledgers, including payments, foreign exchange, securities, and trade.

SWIFT’s Trial for Digital Asset Transactions Will Kick off in 2025

According to a press release from SWIFT on October 3, the first phase of the digital asset transactions trial will focus on payments, foreign exchange, securities, and trade, allowing payments to be processed across multiple ledgers.

This experimental phase assesses how effectively digital assets can be used alongside traditional currencies in real-world applications.

Tom Zschach, SWIFT’s Chief Innovation Officer, emphasized the importance of ensuring that digital currencies integrate smoothly with established financial systems to ensure their global success.

This trial represents SWIFT’s latest blockchain-related advancement for the global banking network.

Earlier this year, SWIFT participated in Project Agorá, a collaboration led by the Bank for International Settlements (BIS) that explores tokenization to address inefficiencies in current payment systems.

This involvement allowed SWIFT to successfully demonstrate the ability to transfer tokenized value across public and private blockchains and interlink central bank digital currencies (CBDCs) globally.

Crypto Adoption Merges with Traditional Finances

SWIFT’s digital asset trials coincide with a broader movement in traditional finance embracing digital assets.

Major financial institutions and platforms have taken steps toward integrating cryptocurrencies into their offerings in recent months.

For instance, PayPal Holdings announced it would allow US merchants to buy, hold, and sell cryptocurrencies from their business accounts.

In August, Morgan Stanley, one of the world’s largest asset managers, informed its financial advisors that eligible clients could now invest in shares of BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund.

Today is a historic day.

Morgan Stanley is among the pre-eminent wealth management firms globally.

Today, they announced that wealth managers can recommend clients own Bitcoin ETPs.

They did the homework. They decided it's important.

The train is leaving the station.

— Hunter Horsley (@HHorsley) August 2, 2024

Additionally, BlackRock launched its first “tokenized fund” earlier this year, offering investors access to US dollar yields via a token issued on the Ethereum blockchain.

Just recently, Franklin Templeton expanded its blockchain-based money market fund, FOBXX, to Arbitrum, a network designed to process Ethereum transactions more efficiently.

Franklin Templeton’s @FTI_DA OnChain U.S. Government Money Fund is now available on Arbitrum!

We’re excited to have access to the BENJI platform and see a major financial institution, Franklin Templeton, build on Arbitrum!https://t.co/CRWCFyz3NM pic.twitter.com/yrlwflYOow

— Arbitrum (💙,🧡) (@arbitrum) August 8, 2024

Traditional banking giants like PayPal and Mastercard are also exploring digital assets, with PayPal launching its own stablecoin, PYUSD, backed by US dollars, and Mastercard collaborating with JPMorgan and Citibank on tokenized asset settlements for cross-border transactions.