Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
2024 10 03T150144Z 3 LYNXMPEK9207O RTROPTP 4 CENBANKS DIGITAL INT
2024 10 03T150144Z 3 LYNXMPEK9207O RTROPTP 4 CENBANKS DIGITAL INT

SWIFT to trial live digital currency transactions next year


By Alun John

LONDON (Reuters) – Global bank messaging network SWIFT will trial live transactions of tokenised assets and digital currencies next year, it said on Thursday, the latest step in the currently slow-moving integration of such assets into the wider financial system.

Banks and asset managers have been exploring “tokenising” traditional assets like bonds for several years.

They hope that by using digital units – usually blockchain-based tokens that represent a share of the underlying asset – trading can be quicker, cheaper and more efficient, including by cutting out middlemen involved in many transactions.

So far, however, these have failed to gain substantial traction in the wider market.

Around 90% of the world’s central banks are also testing

central bank digital currencies (CBDCs), digital versions of fiat money, that facilitate trading of tokenised assets. Monetary authorities are trying to get on top of technological advances that have enabled cryptocurrencies like bitcoin.

SWIFT, which plays a crucial role in global banking, has been engaged in trials of both CBDCs and tokenised assets. In March said it would launch a new platform to connect CBDCs currently in development to the existing financial system.

“Now we see industry demand to move out of that (trial) phase and see a digital asset really move, and have a counterparty pay them in real money against that,” said Nick Kerigan, SWIFT’s head of innovation.

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.

“That’s the stage that we are moving to next year, albeit in a controlled way.”

While the potential is large, the market’s fragmented nature is holding it back and very few initiatives have progressed outside banks’ own internal systems.

Similarly, central banks are testing wholesale CBDCs for cross border payments, but within small groups.

The latest SWIFT initiative involves different types of digital assets in combination across different platforms.

“To successfully trade and settle a tokenised bond transaction, you need the cash and that’s where a tokenised deposit or wholesale CBDC comes in,” said Kerigan.

“It’s not good enough if you just have delivery or just payment, you need both.”

 

(Reporting by Alun John; Editing by Tommy Reggiori Wilkes and Catherine Evans)

 

Recent Post: