The initiative will allow traditional financial institutions access to cryptocurrency assets and accelerate the adoption of blockchain technology into the traditional financial system.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) and Chainlink, a decentralized blockchain oracle network, have partnered to develop a Proof-of-Concept (POC) technology based on the Cross-Chain Interoperability Protocol (CCIP).
The project will link the SWIFT network to most blockchain networks, giving users access to traditional and cryptocurrency assets simultaneously. The POC technology based on the CCIP protocol will enable traditional finance companies to conduct transactions in blockchain networks.
The initiative was revealed during the SmartCon 2022 conference, following a joint statement by Chainlink co-founder Sergey Nazarov and SWIFT Strategy Director Jonathan Ehrenfeld Solé. During his speech, Solé said there is “undeniable interest from institutional investors into digital assets” and the need to get traditional and cryptocurrency assets into one platform.
The introduction of the technologies proposed by Chainlink will allow traditional financial institutions access to the blockchain market and digital assets without requiring any modification of their existing systems and additional costs.
SWIFT is currently the largest interbank information exchange system and the main tool for cross-border payments. Over 11,000 banks worldwide are connected to it. In August 2022, the system daily processed an average of 44.8 million reports.
SWIFT’s main drawback is the speed of transactions, which can take up to several days. That’s why the company is experimenting with central bank digital currencies (CBDC) and distributed ledger technology (DLT).
