CMC News

#SWIFT Partners With Consensys on $ETH #Blockchain Payment Prototype

SWIFT is collaborating with Ethereum software giant Consensys and 30 major financial institutions to develop a blockchain-based prototype for real-time cross-border payments. The partnership includes Bank of America, Citi, Deutsche Bank, JP Morgan Chase, and Wells Fargo, among other banking participants.

The prototype will use a secure ledger with smart contracts to record and validate transactions operating on a 24/7 basis. SWIFT envisions the ledger as a real-time log of transactions between financial institutions that will record, sequence, and validate payments while enforcing rules through programmable contracts.

Neither Consensys nor SWIFT disclosed whether the prototype is being built on the #Ethereum mainnet or the layer-2 network #Linea, which Consensys incubated. Both organizations declined to share additional technical details at this time. Consensys described the development as a defining moment for both traditional and #decentralized finance.

SWIFT's core functionality centers on its messaging system rather than payment rails. The network does not hold customer funds or clear and settle payments directly. Instead, it provides the infrastructure through which banks, brokerages, and financial institutions communicate transaction details, including amounts, currencies, and recipients.

The SWIFT network connects 11,500 institutions across more than 200 countries and territories. In 2022, SWIFT messages corresponded to a daily net value of around $7.5 trillion, according to Citi research. The network processes approximately 53 million financial messages daily.