SWIFT has just announced the launch of a Proof of Concept (PoC) to explore whether Blockchain or Distributed Ledger Technology (DLT) can be used by banks to improve the reconciliation of their nostro databases in real time, optimising their global liquidity.
In April 2016, Blockchain News reported that SWIFT and Accenture cut a deal to build a platform, then promptly right in the midst of two hacker fiascos they put out a bearish paper commissioned by their research arm touting that Blockchain was mythical when it came to getting rid of third parties in trades.
In a turn around they seem to have embraced Blockchain and now say that as part of SWIFT’s global payments innovation (gpi) initiative, which seeks to deliver a new standard in cross-border payments, the new PoC was scoped in collaboration with leading correspondent banks. SWIFT gpi member banks can apply to participate in this PoC, set to launch in early 2017.
Under the current correspondent banking model, banks need to monitor the funds in their overseas accounts via debit and credit updates and end-of-day statements. The maintenance and operational work involved represents a significant portion of the cost of making cross-border payments. This PoC will test whether distributed ledgers may be able to help banks reconcile those nostro accounts more efficiently and in real time, lowering costs and operational risk.
“Whilst existing DLTs are not currently mature enough for cross-border payments, this technology, bolstered by some additional features from SWIFT, may be interesting for the associated account reconciliation,” says Wim Raymaekers, Head of Banking Market and SWIFT gpi at SWIFT. “This PoC gives us the opportunity to test DLT and determine if it can be applied to this particular use case.”
SWIFT will deploy open-source Hyperledger technology, and combine it with key SWIFT assets to bring it in line with the financial industry’s requirements. Using a private blockchain in a closed user group environment, with specific user profiles and strong data controls, user privileges and data access will be strictly governed.
Damien Vanderveken, Head of R&D, SWIFTLabs and User Experience at SWIFT, added:
“SWIFT will leverage its strong governance, PKI security scheme, BIC legal identifier framework and liquidity standards expertise to deliver a distinctive DLT PoC platform for the benefit of its community.”
SWIFT gpi was launched in December 2015 to deliver a new standard in cross-border payments. With more than 90 banks signed up, representing more than 75 percent of SWIFT’s cross-border payments traffic, the initiative has seen tremendous industry support and is set to go live in early 2017.
To learn more, visit swift.com/gpi.
- Token Taxonomy Workshop – - January 24, 2020
- Deloitte Bullish on Libra Project in New Report - January 22, 2020
- Busted: SEC Charges Blockchain Marketplace Founder Sergii “Sergey” Grybniak for Fraudulent ICO 2017 - January 22, 2020
- DC Blockchain Advocacy Group US Chamber of Digital Commerce Supports Telegram Vs. SEC Case - January 22, 2020
- BIS Forms New Central Bank Think Tank to Assess National Cryptocurrencies - January 22, 2020
- Bank of England Pondering National Cryptocurrency - January 22, 2020
- Infamous Online Gaming Community Clanbase to Relaunch With Blockchain Technology in 2021 - January 21, 2020
- Chainalysis: 2019 Saw More Cryptocurrency Hacks – Total Amount Stolen From Exchanges Dropped To $283 Million - January 21, 2020
- J. Christopher Giancarlo, former Chairman of the US Commodity Futures Trading Commission - January 21, 2020
- Ethereum Classic Labs Donates $1 Million to UNICEF Innovation Ventures - January 20, 2020
- Busted: SEC and U.S. Attorney’s Office for the District of New Jersey Files Lawsuits Against Fraudulent ICO that raised $30 million - January 17, 2020
- Kenya Issues Second ICO Warning After Investors Lose €24+ Million Euro - January 17, 2020
- Neufund Wraps Tokenised Equity Crowdfunding Series B with Greyp Bikes raising €1.4m EUR - January 17, 2020
- U.S. Lawmakers Pondering “Crypto-Currency Act of 2020” - January 17, 2020
- New Blockchain-based Visa Token Service Set To Launch in 2020 – Set to Reach $1 Trillion - January 17, 2020
- Germany’s New Shore Invest Launches STO Ship Financing Platform – Tokenised Fractional Ownership - January 16, 2020
- Open Source Luminary Marc Fleury Enters Crypto Arena with Announcement of New Crypto Asset Class and Continuous Token Offering Sale - January 16, 2020
- UN Warns Public Not To Attend North Korea Blockchain and Cryptocurrency Conference 2020 - January 16, 2020
- Fiat-to-Crypto Gateway Solution, Banxa, Raises $2 Million USD Series A Round Led By NGC Ventures - January 15, 2020
- United Africa Blockchain Association Plans to Fire Up Blockchain Adoption - January 14, 2020