Global: Swift Aims to Facilitate Digital Securities Settlements Using Its Global Payments Network

Swift has unveiled its vision for digital assets and payments, with a focus on potentially using its global payment network to support the settlement of digital asset transactions. This move could play a pivotal role in advancing the digital securities market by providing a trusted, regulated infrastructure for settlement.

As a first step, Swift plans to enable “multi-ledger Delivery-versus-Payment (DvP) and Payment-versus-Payment (PvP) transactions” on its secure global platform. These transaction types are critical for ensuring that securities and payments are exchanged simultaneously, reducing settlement risks.

One of the key barriers to the widespread adoption of distributed ledger technology (DLT) and regulated digital assets has been the absence of regulated on-chain cash. To address this, initiatives like the European Central Bank’s (ECB) trials for wholesale DLT settlement are exploring linkages between existing payment systems and newer technologies, including wholesale Central Bank Digital Currencies (CBDCs). In line with this, Swift is examining how it can enable the settlement of tokenized assets using fiat currencies, with the potential to transition to CBDCs or tokenized deposits as they become more widely available.

Swift’s vision also includes exploring the possibility of interconnecting separate blockchain networks, such as linking the Regulated Settlement Network with other blockchain initiatives. This would create a more unified system, streamlining transactions across different platforms.

“We’re excited about the benefits this bold vision will bring and confident that together we can continue to create an even stronger, more inclusive, and future-proof financial ecosystem,” said Thierry Chilosi, Chief Business Officer at Swift.

In addition to securities settlements, Swift is keen to explore blockchain-based solutions for foreign exchange (FX) and trade finance, signaling its broader ambition to reshape financial transactions across sectors.

Swift’s latest announcement builds on its ongoing work with digital assets and CBDCs. Over the past few years, Swift has conducted trials for its CBDC Connector, designed to enable interoperability between multiple CBDCs. In 2023, it completed a series of public blockchain interoperability trials in collaboration with major financial institutions, including BNP Paribas, Citi, and the DTCC. These trials, which integrated Swift’s network with Chainlink’s Cross-Chain Interoperability Protocol (CCIP), demonstrated the potential to connect legacy financial systems with blockchain networks.

Swift’s long-term goal is to establish itself as a key player in the evolving digital asset ecosystem, providing seamless and secure transaction solutions for the global financial industry.