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IPFS News Link • Central Banks/Banking

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

• by Michael McSweene

"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.