Bank Messaging Firm SWIFT Leans Toward Blockchain Integration Over Unifying Tokenization After Experiments – Here's the Latest
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.
In a recent release, “Connecting blockchains: Overcoming fragmentation in tokenized assets,” SWIFT noted that the financial market stands to benefit from interlinks between networks as blockchain adoption grows.
The financial giant mulled the present system associated with blockchain interoperability adding that it can solve the problem after its recent study.
Firstly, it noted that users perceive a lack of “secure interoperability” heightened by the risk of losing assets to bad actors culminating in a poor user experience.
“Interoperability is at the heart of everything we are doing at Swift to facilitate the seamless flow of value across the world in the face of increasing fragmentation. For tokenization to reach its potential, institutions will need to be able to seamlessly connect with the whole financial ecosystem.”
SWIFT’s plan involves deploying Chainlinks Cross-Chain Interoperability Protocol (CCIP), a product that rolled out in July to connect multiple networks providing a unique financial system to users.
The firm also added that the interlinking technique with Chainlink will reduce the running cost of traditional institutions in the renewed efforts to embrace tokenization.
“Our experiments have demonstrated clearly that existing secure and trusted Swift infrastructure can provide that central point of connectivity, removing a huge hurdle in the development of tokenization and unlocking its potential,” Tom Zschach, Swift's Chief Innovation Officer added.
In recent months, several countries and
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