SWIFT, the Belgium-based cooperative that serves as an intermediary and settlement executor of financial transactions between banks worldwide, plans to experiment with tokenizing assets in 2022. In a blog post on the topic, SWIFT notes that it will work with companies such as Clearstream, Northern Trust and SETL to explore “the feasibility and benefits” of using SWIFT as an interconnector to tokenization platforms. Financial intermediary SWIFT is to be used as a tokenization interconnector The Society for Worldwide Interbank Financial Telecommunications (SCHNELL) has been working with cryptocurrencies and blockchain technology for some time. For example, SWIFT published a audit report in September 2020 that known criminals...
SWIFT, the Belgium-based cooperative that serves as an intermediary and settlement executor of financial transactions between banks worldwide, plans to experiment with tokenizing assets in 2022. In a blog post on the topic, SWIFT notes that it will work with companies such as Clearstream, Northern Trust and SETL to explore “the feasibility and benefits” of using SWIFT as an interconnector to tokenization platforms.
The Society for Worldwide Interbank Financial Telecommunications ( FAST), has been working on cryptocurrencies and blockchain technology for quite some time. For example, SWIFT published a Test report in September 2020 that known criminals prefer cash for money laundering as opposed to using crypto for illegal transactions. Over a year later, SWIFT is still focused on this technology and announced in a blog post published on December 1 that it was participating in an asset tokenization test in 2022 notice Conditions:
In collaboration with Clearstream, Northern Trust, SETL and others, SWIFT plans experiments in the first quarter of 2022 to explore how it can support interoperability in the development of the tokenized asset market.
SWIFT's report contains many predictions and insights scattered throughout the research. The organization explains by some estimates, crypto assets, stablecoins and tokenized assets could swell to around “$24 trillion” by 2027. SWIFT understands that tokenized assets can apply to almost anything and can also be fractionalized. Essentially, tokenized assets can help strengthen liquidity and provide global access to those who would otherwise be unable to obtain these types of assets.
“Tokenization,” SWIFT’s report further states. "Can be applied to stocks and bonds, but also to illiquid assets, including commodities, real estate, or even art. For example, a stock or bond with a high value per unit (e.g. over $500) can be divided into digital pieces, each of which has ownership and value. This increases overall asset liquidity and accessibility by allowing a broader demographic to invest in assets that may not have been available to them in the past."
Plans for the first quarter of 2022 include exploring and using tokenization for traditional assets, securities, and other types of market infrastructure. “SETL and Northern Trust will support SWIFT and participants in the integration between the various DLT environments and with transaction orchestrations that leverage their respective capabilities. The results of the experiments will then be shared with the financial world," concludes SWIFT's report. In addition, Vikesh Patel, head of securities strategy at SWIFT, emphasized that the company wants to create an instant and frictionless system.
“Our vision for instant and frictionless transactions applies not only to traditional securities instruments but also to new asset classes,” Patel said in a statement. “The insights from this exercise with leading capital market participants will help us define and prioritize the specific steps required to enable seamless processes for tokenized assets.”
What do you think about SWIFT testing tokenization concepts in 2022? Let us know your thoughts on this topic in the comments below.
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