Global financial messaging service SWIFT has partnered with leading bank and Web3 infrastructure provider Chainlink to test public and private blockchain integrations for global banking.
The Society for World Interbank Financial Telecommunications (SWIFT), the financial messaging system that powers most of the world’s financial and securities transfers, has launched a joint pilot project to connect private and public blockchains.
of collaboration Major banks, Web3 infrastructure provider Chainlink, and several global financial institutions are involved.
The aim is to extend SWIFT’s previous blockchain interoperability effort launched in 2022 to explore the operation of private blockchains with tokenized assets in the financial sector. To strengthen this goal, SWIFT has chosen to leverage Chainlink’s Cross-Chain Interoperability Protocol (CCIP).
According to Jonathan Ehrenfeld, head of securities strategy at SWIFT, the move reflects the growing interest of institutions in serving their clients’ needs via permissioned and public blockchain networks such as Ethereum.
Participants in this collaboration range from financial firms such as BNP Paribas, BNY Mellon, Citi and Euroclear to organizations such as SIX Digital Exchange (SDX) and The Depository Trust & Clearing Corporation (DTCC).
Chainlink contributes to the “enterprise account abstraction layer”, reflecting the widespread adoption of asset tokenization across the banking and financial market infrastructure sectors. According to Chainlink co-founder Sergey Nazarov, this trend could make the blockchain industry ten times bigger.
Nazarov further elaborated on the benefits of CCIP, describing it as a “universal messaging interface” for communication across blockchains. He emphasized its unique advantages in interfacing with private blockchains enhanced by active risk management network capabilities, making it the preferred choice for major financial players.
Embedding the same security model as Chainlink’s oracle network, CCIP has managed over $7 trillion in value. SWIFT’s purpose revolves around exploiting the existing banking system.
As Chief Innovation Officer at SWIFT, Tom Zschach envisions a multi-chain future and believes Chainlink can facilitate cost-effective integration of banks around the world.
This proof of concept is designed to demonstrate the practicality of interoperability across public and private networks. This would require banks to issue security tokens on their private chains using CCIP and then transfer them to the custodian’s chain.
Tokenized securities may then be purchased by a third bank and transferred to its private chain.
The effort could be a step towards allowing banks to optimize different types of securities for public chains.
The program is based on the understanding that digital assets are likely to continue to exist. Nazarov saw this transition as the evolution of independent networks into a single entity known as the Internet.