SWIFT, the global interbank messaging network is planning to explore the possible support of interoperability in the tokenized asset market. The organization will hold several experiments using central bank digital currencies (CBDCs) and established forms of payment in the first quarter of next year.
According to the announcement, the trial will zoom in on improvements in the exchange of information between the participants and systems that interact during the lifecycle of tokenized assets. Aiming for “a frictionless and seamless tokenized digital asset market,” SWIFT should ultimately support the issuance, delivery-versus-payment and redemption processes.
SWIFT is a global messaging network connecting banks and other financial institutions for cross-border payments. With the rise of cryptocurrencies, stablecoins and CBDCs, the organization has to reimagine itself in order to stay relevant in times of increased digitization and decentralization. It states:
“Over the coming decade, tokenised and traditional assets will likely co-exist, and this poses potential challenges. One major risk is that a variety of technologies, platforms and regulatory environments will create a thicket of connections for securities market participants. This could result in inefficiencies and fragmentation, as well as rising costs and risks across the industry.”
Thomas Zschach, SWIFT Chief Innovation Officer, said:
“As a neutral cooperative with a reach across 11,000 institutions in more than 200 countries, and oversight by central banks globally, SWIFT is uniquely placed to engage closely in the future of securities. We look forward to this set of new experiments and innovating collaboratively with market participants on the emerging trend of tokenised assets.”
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Source: Igaming
