BBVA partners with SWIFT to embed blockchain technology in the global financial system
SWIFT, the global financial messaging network connecting more than 11,500 institutions in 200 countries, is set to develop a shared blockchain platform that will function as a common digital ledger for banks around the world. This infrastructure will enable seamless, real-time international payments and transfers and transactions with stablecoins and digital assets. BBVA has joined a consortium of more than 30 partner banks now starting work on a prototype.
The new network will function as a shared, secure digital ledger where banks can record their international transactions in real time, sorting and validating them through smart contracts. Thus, payments made through SWIFT’s blockchain will be available 24 hours a day, seven days a week, with lower costs and without intermediaries. In addition, it will support transactions with stablecoins and tokenized financial assets (digitally represented money, bonds, or deposits), which can be transferred between blockchain networks instantly, securely, and traceably.
SWIFT is working on the prototype in collaboration with Consensys, a company specializing in blockchain solutions. Next steps involve developing and testing use cases to assess how this technology can be integrated into the global financial system. BBVA will provide the consortium with its expertise in digital innovation and global services to validate use cases such as business-to-business payments, international remittances, and asset settlement.
The goal is to move toward a financial system in which international financial transactions are as agile and secure as local transactions. The platform will be interoperable and able to connect with current and future financial networks under the governance and regulatory compliance standards with which SWIFT operates.
The new system will enable financial institutions to securely offer:
- Instant international payments that are not dependent on banking hours or business days.
- Interoperability between existing payment systems, fiat currencies, stablecoins, and digital assets.
- Lower transaction costs by streamlining processes and cutting out middlemen.
- More efficient international settlement processes.