{"id":498188,"date":"2022-10-04T17:34:24","date_gmt":"2022-10-04T14:34:24","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/is-payments-giant-swift-preparing-for-a-blockchain-bound-future\/"},"modified":"2022-10-04T17:34:24","modified_gmt":"2022-10-04T14:34:24","slug":"is-payments-giant-swift-preparing-for-a-blockchain-bound-future","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/is-payments-giant-swift-preparing-for-a-blockchain-bound-future\/","title":{"rendered":"# Is payments giant SWIFT preparing for a blockchain-bound future?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a27199cd5e64\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a27199cd5e64\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/is-payments-giant-swift-preparing-for-a-blockchain-bound-future\/#%E2%80%9D_Is_payments_giant_SWIFT_preparing_for_a_blockchain-bound_future_%E2%80%9C\" >&#8221; Is payments giant SWIFT preparing for a blockchain-bound future?  &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/is-payments-giant-swift-preparing-for-a-blockchain-bound-future\/#Co-opting_an_existential_threat\" >Co-opting an existential threat?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/is-payments-giant-swift-preparing-for-a-blockchain-bound-future\/#Are_cross-chain_bridges_secure\" >Are cross-chain bridges secure?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/is-payments-giant-swift-preparing-for-a-blockchain-bound-future\/#Are_traditional_institutions_ready_for_tokenization\" >Are traditional institutions ready for tokenization?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/is-payments-giant-swift-preparing-for-a-blockchain-bound-future\/#A_boost_to_crypto_adoption\" >A boost to crypto adoption<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Is_payments_giant_SWIFT_preparing_for_a_blockchain-bound_future_%E2%80%9C\"><\/span>&#8221; Is payments giant SWIFT preparing for a blockchain-bound future?  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p style=\"float:right;margin:0 0 10px 15px;width:240px\"><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMTAvYTljODkwYzQtMDZjMC00OWZkLWE2MmYtNTIyNWM5MzVjNjg3LmpwZw==.jpg\" class=\"type:primaryImage\"><\/p>\n<pre><code>                 Are TradFi and DeFi converging, moving toward a middle ground that includes tokenized assets, interoperability and regulation? \n                &lt;p&gt;SWIFT is a payments colossus. It operates across more than 200 countries, has 11,000-plus financial institution clients and transmits some 8.4 billion financial messages every year. It is the global leader in cross-border bank-to-bank payments and recently played a key role in the West\u2019s economic sanctions on Russia.\u00a0\n<\/code><\/pre>\n<p>That doesn\u2019t mean the Belgium-based cooperative is immune to disruption tremors, however. Critics have long <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.credit-suisse.com\/about-us-news\/en\/articles\/news-and-expertise\/forget-bitcoin-but-remember-blockchain-201702.html\">maintained<\/a> the interbank messaging system, founded in the 1970s, is \u201cold, inflexible, slow, and increasingly prone to cyberattacks.\u201d In May, Mastercard CEO Michael Miebach cast doubt upon SWIFT\u2019s ability to survive the next five years. Meanwhile, it continues to be menaced by a rising tide of blockchain-based payment networks on one side and an expected torrent of central bank digital currencies (CBDCs) on the other.<\/p>\n<p>But, last week, in a sign that even entrenched legacy financial networks can (possibly) change their s<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/trip-and-travel\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Trip &amp; Travel\" target=\"_blank\" rel=\"noopener\">trip<\/a>es, SWIFT confirmed a proof-of-concept project with blockchain oracle provider Chainlink. If all goes well, SWIFT\u2019s bank users could easily access and transfer digital assets on multiple blockchain platforms. Days earlier, SWIFT also announced it was using fintech-firm Symbiont\u2019s enterprise blockchain platform to improve its messaging for corporate events like dividend payments and mergers.<\/p>\n<p>These developments raise an intriguing question: Rather than engaging in a zero-sum struggle to the death, are traditional finance (TradFi) and decentralized finance (DeFi) firms actually converging \u2014 i.e., moving toward a common middle ground that includes tokenized assets, DeFi, interoperability and, yes, regulation? <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Co-opting_an_existential_threat\"><\/span>Co-opting an existential threat?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>\u201cAll financial goods will move across blockchain networks in the future,\u201d Matthew Hougan, chief investment officer at Bitwise Asset Management, told Cointelegraph. \u201cIt\u2019s not surprising to see legacy firms looking to adopt and\/or co-opt a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> that represents a fundamental threat to their existence; in fact, it should be <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lauded.\u201d<\/p>\n<p>Of course, this is just a pilot program. Hougan added, \u201cIt\u2019s not like SWIFT got blockchain religion overnight and is converting all their activities to DLT.\u201d But, it\u2019s a start, and for that, the network should be applauded, he suggested. <\/p>\n<p>In this rapidly evolving technological world, \u201cthere is no place for binary viewpoints that embrace an \u2018I win, you lose\u2019 mentality,\u201d especially within its capital markets and finance sector, Mark Smith, CEO and co-founder of Symbiont, told Cointelegraph, further adding:<\/p>\n<blockquote><p>\u201cUltimately what ends up being the norm is usually a hybrid, and we definitely see a melding unfolding that will borrow from the best that TradFi and DeFi have to offer.\u201d\u00a0<\/p><\/blockquote>\n<p>Jonathan Sol\u00e9, strategy director at SWIFT, speaking at last week\u2019s Smartcon 2022 convention in New York, acknowledged an \u201cundeniable interest\u201d on the part of institutional investors in digital assets \u201cwhether these are stablecoins, CBDCs or anything that you can tokenize on the capital markets space\u201d including equities and bonds.<\/p>\n<p>Banks and other TradFi institutions are looking to SWIFT to \u201cbridge the gap\u201d between their infrastructure servicers, like exchanges, custodians and clearing houses, \u201cand all of these new blockchains that are going to provide these services\u201d for tokenized assets, he added at a panel titled \u201cBridging Traditional Finance and DeFi.\u201d <\/p>\n<p>The session was moderated by Chainlink CEO Sergey Nazarov, who noted that SWIFT possessed the TradFi world\u2019s \u201clargest private key infrastructure,\u201d adding:<\/p>\n<blockquote><p>\u201cThere is no reason to get rid of that private key infrastructure that already securely signs transactions to move around trillions of dollars in value. All of those standards can simply have an addition made to them that says: blockchain stuff.\u201d<\/p><\/blockquote>\n<p>But, SWIFT \u201cdoesn&#8217;t necessarily want to build an integration with every single chain on the planet,\u201d added Nazarov, which was why it was exploring Chainlink\u2019s Cross-Chain Interoperability Protocol (CCIP) as a way for it \u201cto become interoperable across all blockchain environments.\u201d<\/p>\n<p>Stephen Prosperi, head of product management and digital securities management of DTCC, which provides clearance and settlement services for U.S. securities markets \u2014 another TradFi heavyweight \u2014 seconded this point. Different digital currencies \u201cwill live across different chains,\u201d and firms like DTCC don\u2019t want to build separate infrastructure to connect to each of the 100 blockchains that host desirable digital assets. A central point of entry like CCIP could therefore be useful.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Are_cross-chain_bridges_secure\"><\/span>Are cross-chain bridges secure?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Smartcon panelists didn\u2019t really address some of the challenges associated with cross-chain bridges, however, including security concerns. \u201cYes, there are security risks with cross-chain projects,\u201d commented Hougan, \u201cwhich is why you need pilot projects like this.\u201d<\/p>\n<p>Cross-chain bridges are designed to solve the problem of interoperability between blockchain platforms. Blockchain networks today \u2014 Bitcoin, Ethereum, Solana and others \u2014 are like the railroad systems in the 19th century before track gauge sizes were standardized. Passengers and freight had to be offloaded to another train when incompatible rail lines met. <\/p>\n<p>Cross-blockchain bridges are designed to solve these sorts of incompatibilities, but the problem is they appear to be vulnerable to hacks. Some $2 billion has been stolen from bridges in 13 separate heists, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/blog.chainalysis.com\/reports\/cross-chain-bridge-hacks-2022\/\">according<\/a> to Chainalysis, most of it this year. Ethereum founder Vitalik Buterin, too, red-flagged cross-chain bridges recently, suggesting they can enable 51% network attacks.<\/p>\n<p>A key problem seems to be that the \u201cbridges\u201d tend to accumulate large amounts of \u201clocked assets\u201d from different blockchains, some quite obscure and not always built with advanced security features, according to Elliptic\u2019s Cross-Chain Report 2022 released Oct. 4, which noted: <\/p>\n<blockquote><p>\u201cThis has made bridges an attractive target for cybercriminals. [&#8230;] From January to July 2022, $1.2 billion worth of cryptoassets were stolen across eight bridge compromise incidents.\u201d<\/p><\/blockquote>\n<p>Chainlink presumably believes it will do a better job with security than cross-chain bridges have done in the past. Nazarov said as much in post-Smartcom interviews. \u201cThat is what CCIP seeks to solve. And I don\u2019t think it\u2019s an intractable problem. I think it\u2019s a solvable problem,\u201d he <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/fortune.com\/crypto\/2022\/09\/28\/chainlink-founder-sergey-nazarov-bullish-on-cross-chain-future-with-swift\/\">told<\/a> Fortune.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Are_traditional_institutions_ready_for_tokenization\"><\/span>Are traditional institutions ready for tokenization?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Apart from the need for interoperability, are there other commonalities that are bringing TradFi and blockchain providers closer together? Are the capital markets ready for tokenization, for instance, Nazarov asked panelists.<\/p>\n<p>\u201cWell, it\u2019s definitely here. It is not going to go away,\u201d answered Sol\u00e9. \u201cWe have adopted all of our messaging standards so that we can make sure that we can cater for the information that is needed for tokenized assets.\u201d <\/p>\n<p>\u201cWe\u2019re actually looking at tokenizing all different types of assets internally,\u201d Victor O\u2019Laughlen, managing director and head of enterprise tokenization at Bank of New York Mellon (BNY), told the panel. BNY\u2019s broker-dealer and investment manager clients \u201cdon&#8217;t want to segregate and manage their assets in different pools. They want to have one client experience.\u201d Another attraction of blockchain-enabled tokenized assets is that they are accessible 24\/7. O\u2019Laughlen added:<\/p>\n<blockquote><p>\u201cIt\u2019s the infrastructure that always stays up, right? The crypto markets have really pushed the financial markets to think about that. And, we need to be able to support our clients at any time zone, in any location.\u201d<\/p><\/blockquote>\n<p>Beyond interoperability and tokenization, there was some interest among the TradFi representatives in DeFi projects proper \u2014 but with caveats. \u201cIf financial services want to go into DeFi mode, there needs to be some sort of regulated DeFi,\u201d said Sol\u00e9, though some might view that as a contradiction in terms.\u00a0<\/p>\n<p>Prosperi echoed the need for a sort of \u201cpermissioned DeFi,\u201d one that had compliance baked in. \u201cAt the end of the day, institutions need to feel like they&#8217;re not going to get busted on KYC, AML \u2014 that they know who they\u2019re transacting with.\u201d<\/p>\n<p>BNY Mellon\u2019s O\u2019Laughlen saw some positives with DeFi protocols, though. \u201cDeFi could benefit intraday liquidity, where liquidity is needed to sort of grease the wheels.\u201d Institutions could begin with lending or borrowing assets or cash, as \u201csome of the more vanilla types of [DeFi] transactions that take place between counterparties and financial institutions would be a great first step.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"A_boost_to_crypto_adoption\"><\/span>A boost to crypto adoption<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Finally, what, if anything, does all this have to do with crypto\/blockchain adoption? Ecumenical panel discussions like what occurred at Smartcon are encouraging, but will partnerships like SWIFT-Chainlink really \u201caccelerate the adoption of DLT blockchains and benefit various institutions all over the capital markets,\u201d as Nazarov suggested?<\/p>\n<p>\u201cIt\u2019s positive <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>,\u201d Hougan told Cointelegraph. \u201cEvery time an entrenched incumbent recognizes that it has to think about the implications of blockchain technology, it makes it easier for the next one to do so. This is another brick in the wall.\u201d<\/p>\n<p>\u201cChainlink has a strong competitive position in providing oracles and trustless data sources, and it grows by integrating those tools into more capital markets and payments networks,\u201d Lex Sokolin, head economist at ConsenSys, told Cointelegraph. \u201cThe purposes of blockchains are different and varied. <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">General<\/a>ly, I do think more integration implies more paths to adoption.\u201d<\/p>\n<p>Smith, for his part, sees a \u201creal maturation\u201d of blockchain technology across financial services, viewing it as the \u201cconnective tissue\u201d that will make both TradFi and DeFi successful. Blockchain technology was created originally to provide a better bank payment system, and 13 years later, it \u201ccontinues to become more widely accepted and adopted among banks, asset managers and global markets,\u201d Smith said. <\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/is-payments-giant-swift-preparing-for-a-blockchain-bound-future\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Is payments giant SWIFT preparing for a blockchain-bound future? &#8220; Are TradFi and DeFi converging, moving toward a middle ground that includes tokenized assets, interoperability and regulation? &lt;p&gt;SWIFT is a payments colossus. It operates across more than 200 countries, has 11,000-plus financial institution clients and transmits some 8.4 billion financial messages every year. It&#8230;<\/p>\n","protected":false},"author":1,"featured_media":498189,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMTAvYTljODkwYzQtMDZjMC00OWZkLWE2MmYtNTIyNWM5MzVjNjg3LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74894,74889,82570,74355,71939,4965],"class_list":["post-498188","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-blockchain","tag-payments","tag-swift","tag-adoption","tag-banks","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/498188","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=498188"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/498188\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/498189"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=498188"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=498188"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=498188"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}