The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has been closely monitoring the evolution of fintech and its impact on its own future. After exploring various projects utilizing new technologies, SWIFT has thrown its support behind a unified ledger payment model.
According to a post on its website, SWIFT specifically examined tokenization and the shared ledger model. It noted that a common infrastructure could provide real-time balance updates to all participants in the shared ledger. However, SWIFT emphasized that messaging is still necessary to transfer additional types of data for value-added services such as AML, compliance, sanctions screening, trade, and accounts receivable reconciliation.
Instead of starting a unified ledger from scratch, SWIFT proposed the creation of a state machine, which is a dynamic model reflecting the current state of transactions and balances across institutions. This model could be built on the existing ISO-20022 messaging technology that is already in use. It could be implemented on a blockchain or on SWIFT’s centralized platform known as Transaction Manager.
The unified ledger technology has gained support from various entities, including the International Monetary Fund through its XC platform and financial institutions participating in the Regulated Liability Network. Additionally, the Bank for International Settlements has also endorsed this model.
After considering several other options, SWIFT, which was established in 1973, settled on the unified ledger model. In 2022, it collaborated with fintech firm Symbiont for a pilot project aimed at enhancing information delivery to corporate clients through Symbiont’s blockchain-driven Assembly platform.
In a 2023 report, SWIFT argued against the use of a unified ledger, instead advocating for SWIFT to serve as a “single point of access” to different blockchain networks.
It is important to note that SWIFT plays a crucial role in the enforcement of economic sanctions worldwide. For instance, in February 2022, at the onset of the Russian invasion of Ukraine, the European Commission ordered the removal of an undisclosed number of Russian banks from SWIFT.
Overall, blockchain technology is revolutionizing the real estate market, and SWIFT’s endorsement of the unified ledger payment model further demonstrates the transformative potential of this technology.