Tom Zschach News

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Messaging cooperative Swift has set itself the task of ensuring interoperability between digital currencies and tokenised assets to overcome the potential risk of fragmentation, caused by the use of different technologies and with different standards and protocols. Last year it carried out sandbox testing that showed its connector technology could enable cross-border transfers and connect CBDCs on different networks with each other, as well as with fiat currencies.

Swift has partnered with three central banks to conduct beta testing of its central bank digital currency (CBDC) connector solution in an effort to advance cross-border payments using CBDCs.

The co-operative in March published the findings of a 12-week period of sandbox testing, in which almost 5,000 transactions were simulated between two different blockchain networks and with existing fiat-based payment systems. The beta solution has taken its next step, with three central banks and monetary authorities, including the Hong Kong Monetary Authority (HKMA) and the National Bank of Kazakhstan, integrating the solution with their own infrastructure for direct testing.Swift has also initiated a second phase of sandbox testing, in which commercial banks, central banks and financial market infrastructures are exploring additional use cases, including trigger-based payments for digital trade platforms, foreign exchange models, delivery vs payment and liquidity saving mechanisms.

Bank messaging network SWIFT has said that blockchain interoperability is a better approach in the short term to financial solutions than uniting Central Bank Digital Currencies (CBDC) and other assets into a single ledger.

Bank messaging network SWIFT has recently shared a report highlighting how SWIFT can connect with blockchains and solve the issue of interoperability between different blockchain networks.

The banking co-operative in June announced that it was working with more than a dozen financial institutions and market infrastructures to test the use of its messaging network as a means to instruct the transfer of tokenised value over a range of public and private blockchain networks.Participants in the project include 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. Web3 services platform Chainlink was used as an enterprise abstraction layer to securely connect the Swift network to the Ethereum Sepolia network, while Chainlink’s Cross-Chain Interoperability Protocol (CCIP) enabled interoperability between the source and destination blockchains.Transfers of simulated tokenised assets took place - between two wallets on the same public distributed ledger technology network; between two wallets on different public blockchains; and between a public and private blockchain network.Tom Zschach, chief innovation officer at Swift says the findings have the potential to remove significant friction slowing the growth of tokenised asset markets and enable them to scale globally as they mature."For tokenisation to reach its potential, institutions will need to be able to seamlessly connect with the whole financial ecosystem," he says.

The fresh initiative follows a proof-of-concept conducted with Chainlink last year on the development of a Cross-Chain Interoperability Protocol (CCIP) that would connect Swift to multiple blockchain networks. Tom Zschach chief innovation officer, Swift, says there’s unlikely to be a single prevailing blockchain network.

The fresh initiative follows a proof-of-concept conducted with Chainlink last year on the development of a Cross-Chain Interoperability Protocol (CCIP) that would connect Swift to multiple blockchain networks. Tom Zschach chief innovation officer, Swift, says there’s unlikely to be a single prevailing blockchain network.

The international payment system Swift has reported positive results from a pilot test of transfers between different central bank digital currencies (CBDCs), saying they see “clear potential and value” in it.

Sandbox participants included the Banque de France, the Deutsche Bundesbank, the Monetary Authority of Singapore, BNP Paribas, HSBC, Intesa Sanpaolo, NatWest, Royal Bank of Canada, SMBC, Société Générale, Standard Chartered and UBS.Tom Zschach, chief innovation officer at Swift, comments: “Our experiments have shown the critical role that Swift can play in a financial ecosystem in which digital and traditional currencies co-exist. Our API-based CBDC connector has been proven to be robust across almost 5,000 transactions between two different blockchain networks and traditional fiat currency, and we’re delighted to have the support of our community in developing it further.

Tom Zschach, chief innovation officer at Swift says that the success showed that the blockchain networks could be interlinked for cross-border payments through a single gateway, and that Swift’s new transaction management capabilities could orchestrate all inter-network communication.“For CBDCs, our solution will enable central banks to connect their own networks simply and directly to all the other payments systems in the world through a single gateway, ensuring the instant and smooth flow of cross-border payments," he says.14 central and commercial banks, including Banque de France, the Deutsche Bundesbank, HSBC, Intesa Sanpaolo, NatWest, SMBC, Standard Chartered, UBS and Wells Fargo, are now collaborating in a testing environment to accelerate the path to full scale deployment.As reported by Finextra yesterday, a seperate Swift-led pilot has also successfully implemented a common framework linking tokenisation systems between CSD’s and global custodians. Working in collaboration with Citi, Clearstream, Northern Trust, and technology partner SETL, Swift explored 70 scenarios simulating market issuance and secondary market transfers of tokenised bonds, equities and cash.

On Wednesday, the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, announced that it has successfully moved central bank digital currencies (CBDCs) and tokenized assets on existing financial infrastructure through two separate experiments. According to SWIFT, the results demonstrated that "CBDCs can be rapidly deployed at scale to facilitate trade and investment between more than 200 countries and territories around the world."

Tom Zschach, chief innovation officer at Swift says that the success showed that the blockchain networks could be interlinked for cross-border payments through a single gateway, and that Swift’s new transaction management capabilities could orchestrate all inter-network communication.“For CBDCs, our solution will enable central banks to connect their own networks simply and directly to all the other payments systems in the world through a single gateway, ensuring the instant and smooth flow of cross-border payments," he says.14 central and commercial banks, including Banque de France, the Deutsche Bundesbank, HSBC, Intesa Sanpaolo, NatWest, SMBC, Standard Chartered, UBS and Wells Fargo, are now collaborating in a testing environment to accelerate the path to full scale deployment.As reported by Finextra yesterday, a seperate Swift-led pilot has also successfully implemented a common framework linking tokenisation systems between CSD’s and global custodians. Working in collaboration with Citi, Clearstream, Northern Trust, and technology partner SETL, Swift explored 70 scenarios simulating market issuance and secondary market transfers of tokenised bonds, equities and cash.

Society for Worldwide Interbank Financial Telecommunications (SWIFT), the global financial messaging network has made a new development on the blockchain front by announcing a partnership with fintech company Symbiont.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) disclosed on Tuesday a partnership with fintech company Symbiont to provide more accurate data for financial firms through blockchain technology.