Global Banks Join SWIFT for Blockchain Cross-Border Payments Trial Using Hyperledger Tech

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SWIFT, the operator of the platform used by the global interbanking system, has revealed details of its blockchain proof-of-concept (PoC) trial that sees participation from a number of global banks for real-time cross-border payments.

Swift has chosen the Hyperledger Fabric, a product developed by the Linux Foundation-led open-source cross-industry collaborative Hyperledger Project, as the core technology for its PoC. It should not come as much of a surprise, with Swift among the founding members of the project.

The goal is to see if blockchain technology can help ‘improve the reconciliation’ of banks’ nostro accounts in real-time, Swift added. Nostro accounts enable international transactions for the global banking system. Essentially, banks park their money in nostro accounts around the world to facilitate international transactions with money available for these transfers closer from nostro accounts closer to the recipient’s destination account.

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Details from yesterday’s announcement reveal participating banks in the Swift PoC blockchain to be Australia and New Zealand Banking Group (ANZ), BNP Paribas, BNY Mellon, DBS Bank, RBC Royal Bank and Wells Fargo. These primary banks will collaborate with Swift to research, build and eventually test the PoC. An additional 20 banks will join the program in the latter stages of the trial to validate and test the concept.

“We are very excited to start the DLT proof of concept with these participating banks,” said Damien Vanderveken, R&D head at SwiftLab and UX (user experience) at Swift. “This is a great step forward and another example of how SWIFT and the industry can work together to solve concrete business challenges with an innovative and collaborative mindset.”

As CCN reported back in January, Swift publicly revealed insights of its blockchain endeavor for the first time. At the time, Vanderveken claimed that Swift had “been targeted in the press as a legacy incumbent that will be doomed by DLT (distributed ledger tech or blockchain tech),” while unveiling Swift’s own take on blockchain solutions.

The tests are to be conducted using five nodes spread across the world from participating banks in Sao Paolo in Brazil, Frankfurt in Germany and Sydney in Australia. The two other nodes were located in stateside Swift offices in California and Virginia.

The blockchain platform will also be enabled with smart contracts, Swift claimed, and will be written in Solidity, a programming language commonly found in the likes of the Ethereum blockchain.

The trial, if successful, is likely to be introduced into Swift’s gpi, or global payments innovation service which offers clients ‘fast, transparent and traceable cross-border payments’. Launched in February this year under the ever-increasing threat of FinTech disruption, Swift claims that nearly 100 banks have signed up for the service, with twelve banks sending ‘several hundreds of thousands cross-border payments’ around the world presently.

Wim Raymaekers, head of banking markets and Swift gpi stated:

The nostro DLT proof of concept is deeply embedded in the Swift gpi story fo streamlining the cross-border payment system. It allows us to explore how this maturing technology can provide a collaborative solution to what our gpi member banks have identified as a significant pain point – nostro accounts reconciliation.

Featured image from Shutterstock.


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