 
 
Global traditional finance payments system Swift has joined forces with Joe Lubin’s Ethereum development company Consensys to develop a blockchain-based settlement network.
Swift Taps Consensys For Blockchain-Based Ledger
According to a Monday official announcement, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) is creating a blockchain in collaboration with over 30 financial institutions, including Banco Santander, Bank of America, BNP Paribas, and HSBC, based on a “conceptual prototype” by Consensys.
The initiative’s first focus is on developing infrastructure for real-time 24/7 cross-border transactions of regulated tokenized value, using smart contracts to record, sequence, and validate transactions.
One of the goals of the new blockchain ledger will be interoperability with “existing and emerging networks,” while also maintaining Swift’s compliance standards.
“The ledger will extend SWIFT’s financial communication role into a digital environment, facilitating banks’ movement of regulated tokenized value across digital ecosystems,” the press release reads. According to Swift, the ledger will support the exchange of tokenized assets, though central and commercial banks will eventually determine the types of tokens.
 
SWIFT does not directly move money itself but is rather a messaging network that supports international bank transactions, which is used by over 11,500 banks and other financial institutions in over 200 countries.
“Through this initial ledger concept, we are paving the way for financial institutions to take the payments experience to the next level with Swift’s proven and trusted platform at the centre of the industry’s digital transformation,” opined Swift CEO Javier Pérez-Tasso at the Sibos conference in Frankfurt.
Can Ripple Provide A Better Alternative To SWIFT?
There have long been suggestions that Swift’s usefulness could decline owing to the growth in use of crypto and blockchain technology.
Back in 2018, just a few years before the U.S. Securities and Exchange Commission dropped the lawsuit bombshell on Ripple, CEO Brad Garlinghouse told Bloomberg that, “What we’re doing and executing on a day-by-day basis is, in fact, taking over SWIFT” as banks and remittance firms signed on to use the XRP Ledger (XRPL).
What followed was a protracted, expensive legal fight that officially ended in August after both parties agreed to drop their respective appeals. The case undoubtedly hampered XRP adoption in the US, with several institutions around the world severing ties with Ripple.
Notably, the conclusion of the long-standing lawsuit gives XRP particularly unique legal clarity that most cryptocurrencies in the market lack.
After the SEC dropped its investigation into Ripple in March, Garlinghouse stated that “the market opportunity is massive” in the US, adding that there was an opportunity to modernize the payment systems from SWIFT.
That said, whether the regulatory clarity is enough for XRP to replace the outdated money transfer system remains to be seen.
Source: https://zycrypto.com/ripple-xrp-rival-swift-set-to-build-blockchain-based-settlement-system-for-24-7-cross-border-payments/
