The global banking network with crypto sauce? SWIFT will boost to the blockchain
In harmony – SWIFT wants to exploit the capabilities of Symbiot’s blockchain solution to optimize the transmission of data relating to important events within a listed company.
SWIFT and blockchain: smoother communication of financial data
With a more decentralized approach, the network of banks wants to get a facelift. According to a communicated September 13, SWIFT will use Assembly, the blockchain platform of fintech company Symbiot, as part of a pilot project that aims to improve the transmission of data related to major events within a publicly traded company, such as a merger or the payment of dividends.
SWIFT’s chief innovation officer, Tom Zschach, talks about harmonizing data from different sources to achieve “a corporate action” through a combination of the SWIFT network, Assembly capabilities and smart contracts from Symbiot.
The blockchain and smart contracts should thus eliminate friction in the current communication process, which still requires manual actions, and which requires the intervention of several intermediaries.
During the transmission of this data, each actor involved uses standards, the specificities of which complicate the exploitation of the information by the receivers. Some information may also be “missing, contradictory or inaccurate”.
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Banks in the era of time, an essential blockchain
Seven organizations from the securities industry, including Citigroup, Vanguard and Northern Trust are participating in this pilot project which, if successful, will significantly contribute to the adoption of blockchain within companies and institutions traditional finance.
In terms of figures, SWIFT connects over 11,000 banking and securities organizations, as well as market infrastructures and corporate clients, which are based in more than 200 different countries and territories.
With the rise of financial solutions developed by crypto companies, SWIFT must now integrate blockchain into its technology, to stay competitive. As early as 2019, Ripple’s CEO, Brad Garlinghouse, had shown the color, stressing that Ripple wants to “take over SWIFT”, thanks to its partnerships with more than 1,000 banks that use its technology.
Currently, SWIFT must therefore face attacks on at least two fronts. On the one hand, the blockchain and cryptocurrencies decentralize the transfer of values, and theoretically present themselves as a faster and less expensive transfer solution. On the other hand, central bank digital currencies could be a more attractive alternative to the network, according to Mastercard.
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