More and more traditional institutions worldwide embrace the power of blockchain technology. Swift, the beating heart of international payment transactions, is now taking a big step towards this digital infrastructure. But what does this mean for a system that processes billions of dollars on transactions every day?
Swift builds blockchain platform with consensys
Swift says in a press release that it is working together with Ethereum (ETH) company Consensys on a new blockchain prototype. The aim is to make cross -border payments faster, more efficient and more direct.
What exactly is Swift?
Swift is the backbone of international payment transactions. The network is used by more than 11,500 banks in more than 200 countries and facilitates billions of dollars on transactions every day. Yet the system has been getting criticism for years because of the relative slowness and high costs. This way it can take days to process a transaction.
The technology is built on the basis of a previously developed prototype and uses smart contracts to automatically validate transactions. Consensys, a software company that builds applications on the Ethereum blockchain, is a logical partner. It was founded by Ethereum co-founder Joseph Lubin.
According to Swift CEO Javier Pérez-Tasso, this is “an important step to renew the payment experience without compromising the trust that Swift is known”.
Many parties also show interest in the application of the new blockchain platform. More than thirty international banks, including HSBC, Banco Santander and BNP Paribas, participate in the pilot phase.
Ripple versus SWIFT
By using blockchain, Swift hopes to retain his dominance in a world that digitizes rapidly. Because the competition is around the corner. For years, the crypto world in Ripple has seen a formidable challenger of traditional payment transactions. With the XRP Ledger (XRPL), the blockchain company offers an alternative to cross -border payments.
Dan MoreHead, CEO of Pantera Capital, recently stated in an interview with CNBC: “Ripple solves an important problem. Faster and cheaper payments are exactly what the system needs.” According to him, Ripple has the potential to replace part of Swift.
Ripple CEO Brad Garlinghouse even predicted during the XRPL APEX Event that the company could take over to fourteen percent of global Swift traffic within five years. That would have enormous implications for the demand for XRP that as a bridge currency serves within the XRPL ecosystem.
Chainlink collaboration is fruiting
Swift has been working with Chainlink (Link) for years to build the bridge between traditional financial systems and blockchain technology. This cooperation has now led to a new prototype with which banks can connect to public and private block chains through existing standards.
Thanks to the infrastructure of Chainlink, institutions tokenized assets, which are digital versions of real assets, such as shares, houses or bonds, can process without adjusting their existing systems. This makes Swift an important step in the transition to a new, digital financial economy.
Source: https://newsbit.nl/swift-gaat-samenwerken-met-ethereum-bedrijf-consensys/
