SWIFT and Banks Collaborate on Instant Cross-Border Payment System

LONDON, Sept. 29 (Reuters) – Global financial messaging network SWIFT and over 30 banks announced they are collaborating on a new system to make cross-border payments instantaneous. This initiative aims to adapt to new forms of digital money, including stablecoins and central bank digital currencies (CBDCs).

SWIFT, which plays a crucial role in international finance, revealed that this blockchain-based ‘shared digital ledger’ is seen as essential for modernizing bank transactions. The timeline for implementation has not yet been defined, but the initial focus is on enabling real-time, 24/7 cross-border payments.

Currently, transactions can take days to complete, so this development may also lower costs for consumers and businesses alike. Based in Belgium, SWIFT’s existing network spans over 200 countries and connects more than 11,000 banks that collectively manage trillions of dollars in transactions daily.

Despite criticism labeling SWIFT as ‘antiquated’ from figures such as Eric Trump, the organization is optimistic that integrating blockchain technology will enhance its resilience and compliance with regulatory standards.

A recent Citi report estimated that up to $4 trillion worth of stablecoins may circulate by 2030, suggesting that stablecoins could transition from niche assets to mainstream financial instruments. Correspondingly, nearly 90% of the world’s central banks are now investigating digital versions of their fiat currencies.

SWIFT also explained that the new digital ledger would facilitate transaction recording, sequencing, and validation, enforcing compliance through smart contracts. The participating financial giants include JPMorgan, HSBC, Deutsche Bank, MUFG, BNP Paribas, Santander, and OCBC, along with a mix of banks from the Middle East and Africa.