Swift today released results from a new series of experiments that show its infrastructure can seamlessly facilitate the transfer of tokenised value across multiple public and private blockchains. The findings have potential to remove significant friction slowing the growth of tokenised asset markets and enable them to scale globally as they mature.
While tokenisation is in its infancy, 97% of institutional investors believe it will revolutionise asset management and be a positive force in the industry1, not least because of its potential to increase efficiency, reduce costs and, by enabling fractional ownership, open up opportunities to more investors.
One issue challenging investors and institutions, however, is that tokenised assets are managed on different blockchains, each with its own functionality and liquidity profile. Interoperability between these blockchains is crucial, otherwise financial institutions must build connections to each platform, creating significant operational challenges and cost.
Working with more than a dozen major financial institutions and market infrastructures and Chainlink, a leading Web3 services platform, Swift has successfully demonstrated that it can provide a single point of access to multiple networks using existing, secure infrastructure, thereby significantly reducing operational challenges and investment required for institutions to support the development of tokenised assets.
The experiments are part of Swift’s wider strategy to ensure secure, global interoperability as new technologies and platforms emerge. They build on work over the past few years to show how Swift infrastructure could support the financial community in interconnecting Central Bank Digital Currencies (CBDCs) and other digital assets with new and existing payments systems.
Tom Zschach, Chief Innovation Officer at Swift, said: “Interoperability is at the heart of everything we are doing at Swift to facilitate the seamless flow of value across the world in the face of increasing fragmentation. For tokenisation to reach its potential, institutions will need to be able to seamlessly connect with the whole financial ecosystem. Our experiments have demonstrated clearly that existing secure and trusted Swift infrastructure can provide that central point of connectivity, removing a huge hurdle in the development of tokenisation and unlocking its potential.”
