Swift’s Interoperability Solution for Tokenised Asset Management

Swift has recently conducted successful blockchain experiments that demonstrate the potential of tokenisation. The experiments show that Swift’s infrastructure has the capability to smoothly facilitate the transfer of tokenised value across various public and private blockchains. This discovery has the potential to overcome existing obstacles and limitations in tokenised asset markets, allowing them to grow and expand on a global scale.

Tokenisation is still in its early stages, but it is widely believed that it will revolutionise asset management and bring positive changes to the industry. Institutional investors, in particular, are highly optimistic about tokenisation due to its potential to enhance efficiency, reduce costs, and provide fractional ownership opportunities to a broader range of investors.

One significant challenge faced by investors and institutions is the management of tokenised assets on different blockchains, each with its own functionality and liquidity characteristics. The key to resolving this challenge lies in interoperability between these blockchains. Without interoperability, financial institutions would need to establish connections with each platform individually, resulting in operational complexities and increased costs.

Swift has worked closely with multiple major financial institutions, market infrastructures, and Chainlink, a leading web3 services platform, to address this challenge. The successful experiments have proven that Swift can offer a single access point to multiple networks using its existing secure infrastructure. This significantly reduces the operational challenges and investment required for institutions to support the development of tokenised assets.

These experiments align with Swift’s broader strategy of ensuring secure global interoperability as new technologies and platforms emerge. They build upon the work done in recent years to demonstrate how Swift’s infrastructure can facilitate the interconnection of Central Bank Digital Currencies (CBDCs) and other digital assets with new and existing payment systems.

Swift collaborated with several major financial institutions, including Australia and New Zealand Banking Group Limited (ANZ), BNP Paribas, BNY Mellon, Citi, Clearstream, Euroclear, Lloyds Banking Group, SIX Digital Exchange (SDX), and The Depository Trust & Clearing Corporation, in conducting these experiments. Chainlink played a crucial role as an enterprise abstraction layer, securely linking the Swift network to the Ethereum Sepolia network. Additionally, Chainlink’s Cross-Chain Interoperability Protocol (CCIP) enabled seamless interoperability between the source and destination blockchains.