SWIFT Launches Blockchain Platform as Ripple CEO Questions Timing

TLDR

• SWIFT announced plans to build a shared ledger platform for banks to settle stablecoin and tokenized asset transactions across multiple blockchains
• Over 30 financial institutions are already engaged with SWIFT’s blockchain project, which marks a shift from messaging to value transfer
• Ripple CEO Brad Garlinghouse called SWIFT’s announcement a marketing play timed for their Sibos conference rather than a meaningful product launch
• SWIFT has been testing blockchain technology since 2017 through pilots with Chainlink, Clearstream, and CBDC projects
• The platform aims to lower technical barriers for banks adopting stablecoins, though concerns remain about fragmentation and SWIFT’s sanctions role

SWIFT, the global financial messaging network, revealed plans this week to create a shared ledger platform. The system will allow banks to settle transactions involving stablecoins and tokenized assets across different blockchains. This marks a major change for the 50-year-old organization that connects over 11,500 banks worldwide.

The new platform represents a shift in SWIFT’s business model. The network currently sends messages between banks but does not transfer value directly. With blockchain technology, the message and the transfer happen simultaneously.

More than 30 financial institutions have already joined the project. Banks are looking for ways to participate in the growing stablecoin market. Traditional banks are taking notice as stablecoins gain adoption globally at a rapid pace.

The platform could lower technical barriers for banks wanting to use stablecoins. Financial institutions face high integration costs when trying to add blockchain capabilities. SWIFT’s existing connections to nearly all global banks could make adoption easier.

SWIFT has been working on blockchain technology since 2017. The company conducted pilot projects with Chainlink and tokenized securities platforms Clearstream and SETL. It also ran tests with central bank digital currencies.

Industry Response and Competition

Ripple CEO Brad Garlinghouse questioned the timing of SWIFT’s announcement. He suggested the prototype rollout was designed to create buzz before SWIFT’s annual Sibos conference. Garlinghouse pointed out that SWIFT was once a major competitor to Ripple in the early days.

In a shareholder letter, Garlinghouse stated that Ripple has been building real digital asset infrastructure while SWIFT announced prototypes. Ripple has expanded into custody services, stablecoins, and development on the XRP Ledger over 13 years. The company recently launched RLUSD, a U.S. dollar-backed stablecoin.

Jake Claver, CEO of Digital Ascension Group, explained Garlinghouse’s perspective to the XRP community. He emphasized the contrast between Ripple’s deployed solutions and SWIFT’s experimental approach. The XRP community viewed the response as proof that Ripple maintains a lead in the space.

Banking Sector Adoption

Barry O’Sullivan, director of banking and payments at OpenPayd, said adoption will require time for regulatory alignment. However, SWIFT is positioning itself to play a role in the evolving stablecoin ecosystem. The platform could bring standardization to the global stablecoin market.

David Duong, head of institutional research at Coinbase, called SWIFT’s move a watershed moment. He noted that the initiative has been developing for years. The shared ledger platform appears to be the next stage in SWIFT’s blockchain transition.

Some experts question whether SWIFT remains necessary in a tokenized financial system. The network’s role in enforcing sanctions has created distrust in countries where banks were cut off. This could limit the platform’s ability to reduce payment system fragmentation.

Existing private stablecoins, central bank digital currencies, and regional solutions may continue operating separately. Fragmentation in the stablecoin ecosystem will likely persist despite standardization efforts. Banks will need to navigate multiple systems as blockchain adoption grows.

SWIFT’s blockchain platform launch shows traditional finance moving closer to crypto infrastructure. Financial institutions are taking steps to stay relevant as digital assets become more mainstream. The network’s decision reflects how quickly the payments landscape is changing.

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