Digital assets as a bridge between digital and traditional currencies, Swift announces on-site trials starting in 2025

The global cross-border payment infrastructure Swift announced that starting next year, banks in North America, Europe, and Asia will begin live trials of digital asset and currency transactions through the Swift network. This signifies that years of experimentation will now move towards reality, allowing financial institutions to use Swift to connect and exchange between existing and emerging asset and currency types.

RWA Market Awaits, Swift to "Connect Digital Islands"

Swift, the leader in global cross-border payment messaging systems, serves over 200 countries and territories, with more than 11,500 financial institutions participating, connecting a total of 4 billion accounts worldwide. As the standard-setter at the foundation of financial institutions, Swift processes over 40 million transactions daily, influencing the future direction of finance.

Currently, 134 countries are exploring CBDCs. Standard Chartered Bank and Synpulse predict the tokenized asset market for RWAs to reach a scale of up to $30 trillion by 2034. A survey by BNY Mellon Bank in New York reveals that as many as 91% of institutional investors are interested in investing in tokenized assets.

Before digital assets and cryptocurrencies can achieve global adoption, they must overcome the differences between various platforms, technologies, and regulatory environments. These differences have led to various RWA projects becoming "digital islands," unable to expand their businesses further, increasing transaction costs and risks. This is the goal that Swift's "Connect Digital Islands" project aims to overcome. Further on-site trials will utilize Swift's existing global network to interconnect various digital and traditional currency platforms, providing banks with a single system for conducting cross-border transactions with digital and fiat currencies, further aiding the growth of this new market.

SWIFT's "Connect Digital Islands" has completed trade, securities, and foreign exchange sandbox experiments, with Taiwan also participating.

Central Banks of Various Countries to Participate in Next Year's Trial Phase

In preparation for next year's trial phase, the Hong Kong Monetary Authority (HKMA) and the Bank of France are leveraging Swift's capabilities to conduct forex use case experiments, as part of the European Central Bank's (ECB) exploration of new wholesale payment technologies.

This trial has been upgraded to live trials, which means testing will be conducted in a real environment. With the participation of actual users, the performance and effectiveness of the entire technology or system in real-world situations can be better evaluated, symbolizing that years of experimentation are moving towards reality.

Swift was recently appointed as a participant in the Bank for International Settlements (BIS) project Agora, where seven central banks are collectively exploring tokenization projects based on blockchain technology.

Bank for International Settlements Blockchain Project Agorá: Seven Central Banks Explore the Combination of Tokenized Finance and CBDCs

Tom Zschach, Chief Innovation Officer at Swift, stated:

For digital assets and currencies to succeed on a global scale, they must seamlessly coexist with traditional forms of currency. We are now focused on demonstrating this in mainstream real-world applications.