SWIFT seems fully aware that traditional finance will soon have to coexist with modern alternatives, or even cede part of the ground to them. The figures also show that the Web3 ecosystem is attracting growing interest around tokenization solutions. Thus, SWIFT, UBS Asset Management and Chainlink recently tested a new solution allowing transactions of tokenized funds to be settled in fiat currency via the SWIFT network. A milestone for the future of digital finance.
Tokenization: Modernizing fund management using blockchain
This pilot project, carried out as part of theProject Guardian initiative of the Monetary Authority of Singapore (MAS), aims to transform fund management processes. By integrating blockchain into fiat currency payments, SWIFT, with a project for instant transfers of RWA cryptos, hopes facilitate and accelerate subscription and redemption transactionsespecially for tokenized funds.
The issue? Improve speed and transparency, while reducing operational costs.
As part of this testthe SWIFT network made it possible real-time transactions between investors and tokenized fundswithout the need to use only “on-chain” payments. In other words, SWIFT leverages existing infrastructure to integrate digital assets without reinventing the wheel.
According to Jonathan Ehrenfeld, Head of Strategy at SWIFT:
“ For digital assets to achieve widespread adoption, they must integrate seamlessly with existing payment systems. »
Some key figures:
- 11,500 institutions connected to the SWIFT network;
- More than 200 countries covered;
- Global fund market: $63 trillion;
- Potential market for tokenized securities: 4,000 billion by 2030.
This pragmatic approach represents an opportunity for investors and asset managers touse a hybrid model, between traditional finance and digital innovations. Thanks to Chainlink, which acts as a blockchain “oracle”, SWIFT can facilitate hybrid transactions, marking a step towards more modern finance.
Crypto-assets: Towards mass adoption thanks to existing infrastructures
As crypto grows in popularity, SWIFT and its partners are banking on their global infrastructure to capture this growth. The test in question, in partnership with UBS Asset Management and SBI Digital Markets, relies on Chainlink (LINK) to orchestrate tokenized fund payments, particularly on Ethereum, where UBS launched its “uMINT” fund.
This initiative clearly shows the intention of the financial giants to not remain on the sidelines of the development of crypto-assets.
By leveraging the SWIFT and Chainlink networks, this test aims to make fund transactions more fluid and automated. No more tedious manual steps and delays! From now on, thanks to blockchain, the integration of fiat currency payments allows for increased transparency and efficiency.
According to Sergey Nazarov, co-founder of Chainlink, “ This adoption of off-chain payments will promote the flow of capital and expand the user base of digital assets. »
This project also aims to demonstrate the ability of financial institutions to manage digital assets without relying entirely on cryptos or blockchains. Welcome flexibility for crypto regulators, but also for investors who will be able to diversify their portfolios while benefiting from better liquidity.
So, why would SWIFT and other financial behemoths like Goldman Sachs let this tokenized securities market pass, which represents billions of dollars at stake?
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