SWIFT representatives shared their vision of uniting existing blockchain networks and traditional financial infrastructure, focusing on the prospects for the development of the tokenized assets market.
Combining tokenized assets and CBDCs within a single ledger looks a less preferable scenario for developing the financial market, compared to the gradual integration of traditional systems with blockchain networks. This opinion was expressed by SWIFT in the report “Connecting blockchains: Overcoming fragmentation in tokenized assets.”
SWIFT researchers note that 97% of institutional investors consider tokenization a revolutionary solution in the field of asset management. However, the tokenization market development faces the fragmentation of the existing financial ecosystem and blockchain networks, each with its own functionality and liquidity profile.
As a solution, SWIFT offers its own developments to interconnect different blockchain networks and financial structures within the existing infrastructure. Thus, full interoperability between different blockchain networks and financial systems is ensured by the Chainlink Cross-Chain Interoperability Protocol (CCIP). The technology has already been tested in several experiments involving major financial institutions such as Australia and New Zealand Banking Group, BNP Paribas, BNY Mellon, Citi, Clearstream, Euroclear, Lloyds Banking Group, and others.
SWIFT’s solution greatly simplifies operational processes and reduces costs for institutions to support tokenized assets. Among other things, the SWIFT report emphasizes many potential benefits of tokenization, including increased liquidity and automation, along with greater transparency and security.
The cooperation between SWIFT and Chainlink on the issues of combining traditional finance and crypto-assets first became known at the end of September 2022. Then there was information that SWIFT was working on global interoperability of various CBDC projects and tokenized assets, as well as their integration into the existing financial infrastructure. The tests of such a system were successful, and the research continued. Besides, SWIFT researchers started to address the interoperability of various blockchain networks based on the existing infrastructure.
