By Joe Silvia
On October 3, 2024, the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”), the global bank messaging network, announced plans to allow global financial institutions the ability to use its platform to conduct pilot transactions for the settlement of digital assets and currencies starting in 2025. This announcement is just the latest advancement for the digital assets ecosystem as it moves the settlement of digital assets and currencies from Swift experimentation to live transactions.
Swift indicated that “these trials will demonstrate how financial institutions can transact interchangeably across both existing and emerging asset and currency types using their current Swift connection” and the “trials aim to address a key challenge in the continuously evolving digital asset market: the rise of disconnected digital platforms, or ‘digital islands’, that could hinder more widespread adoption and ease of use for new forms of value.” Swift notes that its ultimate vision in this space is to give financial institutions a single point of access to multiple digital asset classes and currencies, and this move to pilot transactions “marks an important milestone” toward that ultimate vision.
While the announcement reflects the continued interest and demand for further integration of digital assets in the global financial system, we anticipate continued sluggish progress to that end given the broad range of stakeholder perspectives.