Specifically, Swift has released findings from a recent series of experiments showcasing the capability of its infrastructure to facilitate the seamless transfer of tokenised value across various public and private blockchains. The results suggest the potential to address obstacles impeding the growth of tokenised asset markets and to facilitate their global scalability as they mature.
According to the official press release, although tokenisation is still in its early stages, a significant percentage of institutional investors (97%) believe it holds the potential to revolutionise asset management and bring positive changes to the industry. This is primarily due to its ability to enhance efficiency, cut costs, and enable fractional ownership, thereby expanding access for a broader range of investors.
However, a significant challenge for investors and institutions arises from the fact that tokenised assets operate on diverse blockchains, each with distinct functionalities and liquidity characteristics. Establishing interoperability between these blockchains is important. Otherwise, financial entities must individually connect to each platform, incurring operational complexities and costs.
Collaborating with prominent financial institutions, as well as Chainlink, a leading Web3 services platform, Swift has successfully exhibited the capacity to offer a unified access point to multiple networks using its existing secure infrastructure. This achievement has the potential to considerably lessen operational difficulties and financial outlay required for institutions to foster the development of tokenised assets.
These experiments align with Swift's broader strategy to ensure secure and global interoperability amidst the emergence of new technologies and platforms. The experiments build upon prior efforts to demonstrate how Swift's infrastructure could support the interconnection of Central Bank Digital Currencies (CBDCs) and other digital assets with both new and existing payment systems.
Swift collaborated with several major financial institutions, including ANZ, BNP Paribas, BNY Mellon, Citi, Clearstream, Euroclear, Lloyds Banking Group, SDX, and DTCC. Chainlink was employed as an enterprise abstraction layer to securely link the Swift network to the Ethereum Sepolia network, with Chainlink's Cross-Chain Interoperability Protocol (CCIP) ensuring complete interoperability between source and destination blockchains.
Apart from confirming that Swift's existing infrastructure can securely and scalably connect financial institutions to various blockchain types, the experiments advanced the understanding of the technical and business requirements for interacting with business and public blockchains. The trials also explored the value of a blockchain interoperability protocol for secure data transfers between existing systems and an extensive array of blockchains.
The experiments encompassed the design and technical development of solutions, as well as considerations regarding data privacy and governance, operational risk, and legal responsibility. Simulated transfers of tokenised assets occurred among wallets on the same public Distributed Ledger Technology network, between wallets on different public blockchains, and between a public and private blockchain network.
Swift intends to further collaborate with the financial community to pinpoint concrete use cases for the adoption of tokenised assets, prioritising its efforts accordingly.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now