SWIFT will test how it might play a role in asset tokenization next year

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is planning to conduct a trial early next year that will see the global payments intermediary explore how it may play a role in the nascent asset tokenization market.

"SWIFT, Clearstream, Northern Trust, SETL and other industry participants are exploring the feasibility and benefits of SWIFT as an interconnector, linking up multiple tokenisation platforms and various cash-leg payment types," SWIFT said in a blog post published on December 1, noting:

"As interest increases, SWIFT is exploring how it can enable and improve interoperability between participants and systems during the transactional lifecycle of tokenised assets. To this end, SWIFT plans a series of experiments in Q1 2022 leveraging its trusted role as a central platform to explore the issuance, delivery versus payment (DVP), and redemption processes, to support a frictionless and seamless tokenised asset market. These experiments will use both established forms of payment and central bank digital currencies (CBDCs)."

The move is unsurprising, given that SWIFT has long been public about its experiments with the technology, though some in the industry have questioned the applicability of crypto to a transaction intermediary. SWIFT functions as a communications platform for international payments and the sending of payment orders between parties. 

Earlier this year, SWIFT launched what it called SWIFT Go, an effort to link banking companies with real-time payments. SWIFT is also planning to go live with an international payments platform next year.