Global financial messaging network, Swift is working on enabling real-time payments and settlement of tokenized securities directly on its network.
Swift, a global financial messaging network, said it is currently developing real-world solutions to interlink the fiat currencies with various types of tokenized assets as part of its vision to provide its users access to existing and emerging asset types. This could facilitate owners of securities to pay for and settle Tokenised assets in real-time directly on its network.
Swift in a statement said, “We have a strong track record as a trusted and efficient central platform for transactions using fiat currencies and securities instruments. Now we’re further evolving our infrastructure to be able to offer our members the same level of access to emerging digital asset classes and currencies across a range of use cases in payments, securities, FX, trade and beyond.
Further ahead, Swift’s plans involve testing to enable multi-ledger DvP and PvP settlement on the Swift platform, which could provide an open window for securities buyers to settle and deliver tokenized assets simultaneously. In securities transaction settlements, DvP and PvP are two different methodologies. The former is concluded when the delivery of the security is made after the payment has been credited, while the latter settlements occur when concurrent payments are made by both buyer and seller.
Without a globally digitally accepted form of money, the cash leg in executing DvP settlement is particularly challenging. So what we’re looking at is ways to connect tokenized asset settlement with the corresponding payment transfer taking place on the Swift network, Swift said.”
Swift said the payment leg will first be made using fiat currencies but will later accommodate digital assets such as CBDCs or regulated stablecoins.
The financial messaging platform announced last month that the completion of a series of tests for the capability of blockchain technology in asset tokenization. Swift made the announcement after working with Chainlink, a Web3 services firm as an enterprise abstraction layer to connect its network to the Ethereum Sepolia test network. This experiment showed that Swift can provide one single point of access to multiple blockchain networks, and this would support institutions that are developing tokenized assets.