Swift is currently working on a blockchain-based shared ledger network in partnership with Joe Lubin's Ethereum development firm Consensys, the Financial Times reports.
The yet-to-be-launched network will be primarily used for conducting real-time cross-border payments, meaning that it will be competing directly with enterprise blockchain firm Ripple, which is now known for its association with the popular XRP cryptocurrency.
The ledger network will aim to increase the speed of transactions and reduce fees to make transfers more efficient.
The project involves a slew of financial institutions from all over the globe, including U.S. banking giant JP Morgan and European heavyweight Deutsche Bank. All of these participants will be testing out a prototype that is currently being developed in collaboration with Consensys.
It is worth noting that the infrastructure developed by Swift and its partners will support regulated stablecoins as well as tokenized assets. The system will be able to work with both public and private blockchains.
Defenise pivot
Swift's move to roll out its own blockchain is meant to ensure that the main messaging network for international payments will remain relevant amid the growing proliferation of stablecoins, according to the FT report. Global management consulting firm McKinsey, for instance, has warned that the blooming stablecoin industry poses a threat to the Belgium-based group.
The ledger network, which is currently under development, will dissuade banks from bypassing Swift in the future.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team