Swift is building a blockchain platform to modernize
international payments amid growing competition from stablecoins.
According to the Financial Times, the payments
cooperative has joined forces with banks such as Bank of America, Citigroup,
and NatWest to create a blockchain that enables instant, continuous transaction
validation across borders.
Join stablecoin builders in London at the fmls25
This move is designed to streamline global transfers
and reinforce Swift’s role in a digital payments landscape increasingly
dominated by stablecoins.
Swift’s Blockchain Project Responds to Stablecoin
Pressure
Stablecoins, digital assets pegged to fiat currencies,
have surged in popularity, offering low-cost, direct transfer options outside
traditional banking channels.
The sector, estimated at $300 billion, threatens
established payment networks by eliminating intermediaries and reducing
transaction times. Swift’s response is to implement a blockchain that can
sequence, record, and verify tokenized transactions, including stablecoins,
using smart contracts to enforce transaction rules.
Swift has partnered with Consensys, a blockchain
technology firm led by Ethereum co-founder Joseph Lubin, to develop and test
the new shared ledger.
Related: Coinbase to List First Singapore Dollar Stablecoin in Collaboration with StraitsX
The prototype will undergo trials with participating
banks to determine suitable currencies and transaction corridors for initial
rollout. The collaboration signals a significant step for Swift in embracing
blockchain technology for mainstream banking operations.
Banking Sector’s Digital Token Strategy
The push for blockchain comes as regulators and banks
globally explore digital currencies. Recent US legislation introduced in July regulates stablecoins closely, prompting banks, including JPMorgan Chase and Citigroup, to consider issuing proprietary stablecoins.
Meanwhile, nine European banks, led by UniCredit and
ING, reportedly plan to launch a euro-backed stablecoin by mid-2026, aiming to offer an
alternative to dollar-denominated digital tokens.
Alongside blockchain development, Swift is working to
enhance payment transparency with new measures to guarantee fee predictability
and instant settlement for retail transactions.
These changes respond directly to stablecoin
attributes, which prioritize speed and low cost. They provide users with full
transaction value and clarity on pricing.
The popularity of stablecoins is on the rise even as the
regulations catch up. Recently, the Australian Securities and Investments
Commission introduced temporary licensing exemptions for intermediaries that
distribute stablecoins issued by licensed entities.
The intermediaries distributing stablecoins issued by an
Australian financial services licensee are reportedly not required to obtain
their own AFS, market, or clearing and settlement facility licenses.
This article was written by Jared Kirui at www.financemagnates.com.
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