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Collaboration between SWIFT and Chainlink to Integrate Blockchain in Banking


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SWIFT, the global financial messaging service, is partnering with major banks and Web 3 infrastructure provider Chainlink to test the integration of public and private blockchains for global banking.

The Society for Worldwide Interbank Financial Telecommunications (SWIFT), the financial messaging system that drives the majority of global money and securities transfers, has created a joint pilot project to connect private and public blockchains.

The collaboration includes leading banks, web infrastructure provider 3 Chainlink, and several global financial institutions.

The goal is to expand on SWIFT’s previous interoperability efforts, which began in 2022 to explore the operation of blockchains for tokenized assets in the financial sector. To further this goal, SWIFT has chosen to take advantage of Chainlink’s Cross-Chain Interoperability Protocol (CCIP).

The move reflects a growing institutional interest in meeting customer needs via public and licensed blockchain networks such as Ethereum, according to Jonathan Ehrenfeld, head of securities strategy at SWIFT.

Participants in this collaboration range from financial firms such as BNP Paribas, BNY Mellon, Citi and Euroclear to organizations such as SIX Digital Exchange (SDX) and The Depository Trust & Clearing Corporation (DTCC).

Chainlink contributes to the “enterprise account abstraction layer,” which reflects widespread adoption of asset tokenization across the banking and financial market infrastructure sectors. According to Sergey Nazarov, co-founder of Chainlink, this trend has the potential to multiply the size of the blockchain industry tenfold.

Nazarov went into more detail on the benefits of CCIP, describing it as a “universal messaging interface” for communications over the blockchain. He highlighted its distinct advantage in interacting with a private blockchain, backed by the features of an active risk management network, which positions it as a preferred choice for major financial players.

Incorporating the same security model as Chainlink’s oracle network, CCIP has managed over seven trillion dollars in value. SWIFT’s goal is to exploit existing banking systems.

As Director of Innovation at SWIFT, Tom Zschach envisions a multi-chain future and believes that Chainlink can facilitate cost-effective integration for banks around the world.

The proof of concept is designed to demonstrate the practical application of interoperability across public and private networks. It entails the issuance of a security token on a private chain by a bank, using CCIP, followed by its transfer to the custodian chain.

Later, the tokenized securities can be bought by a third bank and transferred to their own chain.

This endeavor could be a step towards enabling banks to optimize different types of securities for public chains.

The program stems from the understanding that digital assets are likely to stay here. Nazarov equated this transition to the evolution of independent networks to the single entity known as the Internet.

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