According to the latest news, it appears that Swift and Chainlink are collaborating with major financial institutions to deploy the use of CCIP in order to connect their systems with any blockchain network.
Below are all the details.
The goal of Swift and Chainlink: to bring traditional markets into crypto and DeFi
As anticipated above, Swift and Chainlink recently announced a collaboration with over twelve major financial institutions to demonstrate how these institutions can use Swift and Chainlink’s CCIP cross-chain interoperability protocol to seamlessly connect their systems to any blockchain network.
It is worth mentioning that Swift is the leading global interbank messaging system connecting more than 11,000 banking and financial institutions in more than 200 countries, while Chainlink is the world’s largest Web3 services platform.
Specifically, more than a dozen major financial institutions, including Citi, BNY Mellon, Lloyds Banking Group, Depository Trust and Clearing Corporation (DTCC), BNP Paribas, Australia and New Zealand Banking Group Limited (ANZ), Clearstream, Euroclear, and SIX Digital Exchange (SDX), are collaborating.
These institutions will leverage the existing Swift infrastructure to efficiently facilitate the transfer of tokenized value across a wide range of public and private blockchain networks using Chainlink.
According to Sergey Nazarov, co-founder of Chainlink, this collaboration is bringing traditional capital markets into the world of cryptocurrencies and decentralized financial applications (DeFi).
In particular, he believes that the successful integration of the largest banks as well as the largest clearing and settlement systems in the context of web3 technology is what could grow the cryptocurrency market from $1 trillion to $10 trillion:
“If even a small portion of the quadrillions of dollars in value flowing through the Swift network and its over 11,000 member banks makes its way onto blockchains, the entire blockchain industry could grow multiple times larger very quickly.
We are extremely excited to help accelerate the speed at which banks can utilize blockchains and believe that it will be a watershed moment when the first bank consortiums begin interacting via CCIP.”
The connectivity between banks and blockchain created by CCIP will enable the growth of DeFi
Continuing to talk about Swift and Chainlink’s collaboration with the major financial institutions mentioned above, Sergey Nazarov, said the following:
“We are also very excited to have the largest market infrastructures like DTCC and Euroclear participating as part of the collaboration, as well as some of the largest global banks like BNP Paribas, BNY Mellon, and Citi. In my opinion, this already signals that large multi-trillion dollar pools of capital plan to move value on-chain, making the blockchain industry multiple times larger than it is today.”
Indeed, we see that the combination of Swift and Chainlink offers an accessible and integrable solution that allows thousands of financial institutions to securely and cost-effectively send their value across numerous blockchains.
This approach provides a unified interface for accessing different blockchains, simplifying and securing the interaction between banks and this new way of transacting both with each other and with their customers.
The connectivity between banks and blockchains provided by CCIP can also foster the growth of DeFi, as banks will find it increasingly easy to interact with public blockchains and transfer value to and from them using their existing systems.
This will also help improve the overall efficiency of the financial sector and expand the opportunities offered by blockchain applications.
Swift and the beta version of the Central Bank Digital Currency (CBDC)
In recent months, we have seen that Swift’s various projects include implementing the beta version of the Central Bank Digital Currency (CBDC), which has received support from eighteen central and commercial banks, which have encouraged its development.
These banks include Intesa Sanpaolo, Banque de France, Deutsche Bundesbank, Monetary Authority of Singapore, HSBC, NatWest, SMBC, Société Générale, Standard Chartered, and UBS.
The cooperative company released the results of a 12-week collaborative test, during which nearly 5,000 transactions were simulated between two different blockchain networks and existing fiat payment systems.
Participants processed a total of 4,736 transactions between the Quorum and Corda blockchain networks, performing CBDC-to-CBDC, and between Corda and fiat currency, performing CBDC-to-fiat.
In addition, the eighteen banks involved in the trial expressed strong support for the continued development of the solution, acknowledging that it enabled frictionless exchange of the CBDC, even between different platforms.