Cryptocurrencies and blockchain technology are slowly but surely making their way into the traditional banking system. One of the latest examples is the partnership between Chainlink and SWIFT. Both companies are working on an infrastructure that will help SWIFT instruct token transfers. This innovation will allow financial institutions to easily integrate blockchain technology via SWIFT.
SWIFT may soon interact with blockchain crypto assets
SWIFT is a global payments network that facilitates cross-border payments. SWIFT is used by banks and financial institutions around the world.
Recently, the SWIFT company announced that it is partnering with Chainlink as featured today in our crypto news, a leading blockchain company for building cryptocurrency-based infrastructure. This new infrastructure will enable SWIFT to offer its customers a more efficient service.
Chainlink is a decentralized network that provides secure and reliable data for smart contracts. The partnership between SWIFT and Chainlink will allow SWIFT to offer its customers a more secure and efficient service thanks to the blockchain.
SWIFT, the global payment network, has gained access to cross-chain interoperability de Chainlinkwhich means it will now be able to order token transfers in every blockchain environment.
This is a major development, as it will eventually allow financial institutions to adopt blockchain technology without incurring the significant costs of setting up and developing their own blockchain infrastructure. Additionally, blockchain technology provides a tamper-proof record of transactions.
The prototype will use Chainlink’s Cross-Chain Interoperability Protocol (CCIP). This protocol allows different blockchains to communicate with each other, which is essential for the project since SWIFT currently only supports cryptocurrency transfers between two banks on the same blockchain.
Thanks to the CCIP, banks will be able to use SWIFT to order token transfers on almost any blockchain.
What are the expectations of this project?
The implications of this development are enormous. On the one hand, it would allow financial institutions to invest more easily in cryptocurrencies.
It would also give them more flexibility in terms ofuse of blockchain technology. Currently, many banks are reluctant to commit to a specific blockchain due to the risk of being locked into a particular platform.
With this proof of concept, this risk is mitigated since banks can easily transfer their tokens to another blockchain if needed.
Additionally, this pilot project could lay the groundwork for further integration of traditional and digital assets, making it easier for investors to move between the two worlds.
As the world of finance continues to evolve, it is important that we find ways to bridge the gap between traditional assets and digital assets. This latest development from SWIFT is a promising step in the right direction.
SWIFT makes an offer for TradFi interoperability
With demand for interoperability growing by leaps and bounds in recent months, native cryptocurrency companies and traditional finance investors are looking for opportunities to get their piece of the pie.
TradFi players want to be able to connect to all asset classes on a single network. In 2021, SWIFT disclosed that it was exploring opportunities to improve the exchange of information between systems that interact during the lifetime of tokenized assets.
As the world of finance begins to shift towards digital assets, the need for interoperability between traditional and digital assets has become increasingly evident. However, bridging the gap between these two worlds proved to be a real challenge.
In this sense, the partnership between Chainlink and SWIFT is important, as it shows that traditional financial institutions recognize the potential of blockchain technology. Such a partnership will help further legitimize blockchain technology and could lead to wider adoption in the future.