A prominent player in the global financial services sector is calling for collaboration among blockchain technology companies to identify optimal solutions for modernizing financial transactions. Thierry Chilosi, Chief Business Officer of SWIFT, emphasized the urgent need for collective efforts as financial institutions embark on a journey to enhance their services.
SWIFT is currently spearheading a cooperative initiative involving 30 major banking institutions and consulting with central banks to determine the most effective tokens and blockchain-based settlement models. The initiative includes ongoing tests with notable blockchain technologies, such as Ripple (XRP) and Hedera Hashgraph (HBAR).
Chilosi highlighted the progress being made toward integrating a blockchain-based ledger into SWIFT’s infrastructure. By collaborating with a global consortium of over 30 banks, the design of this ledger is being meticulously shaped. “To unlock the benefit of scale, we need to work together,” he stated.
The current phase of testing is notably network-agnostic, with a primary focus on achieving interoperability, cross-chain capabilities, and cost-effectiveness. HBAR has demonstrated impressive capabilities in live pilots, processing up to 10,000 transactions per second, showcasing its efficiency in the realm of Distributed Ledger Technology (DLT).
In parallel, SWIFT is evaluating Ripple’s XRP Ledger, particularly the On-Demand Liquidity (ODL) feature, which could allow Ripple to capture a portion of SWIFT’s vast $155 trillion annualized trading volume. Ripple’s status as a dominant player in the cross-border market is underscored by a trading volume of $4.38 billion across spot markets, firmly positioning XRP at the forefront.
Although HBAR’s trading volumes are competitive—recording $189 million recently—the coins do not attract the same level of attention as XRP. However, both XRP and HBAR are compliant with SWIFT’s new ISO 20022 global standard, which enhances data exchange and simplifies integration between traditional banking and blockchain technologies.
At a recent conference in Denver, SWIFT’s Director of Industry Engagement, Alisa DiCaprio, articulated the need for a more immediate transaction settlement process, highlighting that the traditional banking model, which can take three to four days, is becoming increasingly obsolete. Combining these insights, Chilosi reiterated the importance of collaboration during a recent Sibos event, emphasizing that the end of Q4 blockchain tests could mark significant developments in SWIFT’s choice between XRP and HBAR as its primary blockchain partner.
As the industry seeks to navigate this evolving landscape, SWIFT’s recent migration to the ISO 20022 messaging standard further underscores its commitment to interoperability and signals a clear invitation for blockchain networks like XRP and HBAR to align for seamless integration within the cross-border payment system.
The competition in this space continues to heat up, with both XRP and HBAR positioned as key players. XRP benefits from extensive institutional partnerships and liquidity, while HBAR boasts advantages in governance and speed. With the ISO 20022 standard upgrade driving adoption, the outcome of this collaboration will shape the future interactions between traditional financial systems and emerging blockchain technologies.
