Swift's New Project "Connecting Digital Islands": Linking Multi-Ledger Settlement, Optimizing RWA Interaction Experience

Global cross-border payment processing facility Swift announced a new initiative on September 11th to optimize global transactions, enabling users to process transactions involving traditional and digital assets through Swift. The initiative will test multi-ledger securities simultaneous delivery and settlement DvP, funds transfer synchronously PvP, and focus on the tokenization of real-world assets RWA. According to Standard Chartered Bank's prediction, the market value of RWA could reach $30.1 trillion by 2034.

Swift is actively embracing blockchain technology, providing a single entry point for financial institutions to transition to tokenized assets.

RWA Digital Ledger Still Fragmented

Swift has stated that before digital assets and cryptocurrencies can become globally mainstream, the differences between various platforms, technologies, and regulatory environments must be overcome. These differences have led to various RWA projects becoming "digital islands," unable to expand their businesses further, and have increased transaction costs and risks. This is mainly due to the lack of globally recognized forms of digital currencies.

According to the latest data from the Atlantic Council, currently over 130 countries worldwide are exploring the possibilities of Central Bank Digital Currencies (CBDCs). However, these emerging currencies still require a lot of work to integrate into the broader global economy.

Swift Upgrades "Connecting Digital Islands"! Three Central Banks Testing CBDC Interoperability Solution

Future Inclusion of CBDCs to Facilitate Collaboration of Digital Solutions

The initial phase of the project will involve testing with fiat currencies, and in the future, it will gradually incorporate Central Bank Digital Currencies (CBDCs), tokenized commercial bank currencies, and regulated stablecoins. In addition, Swift is also exploring how to integrate different digital assets with banking networks to address interoperability issues.

Tom Zschach, Swift's Head of Innovation, stated: "Digital currencies and tokens have the potential to change the future of payments and investment, but it depends on whether different digital solutions can collaborate with each other."

Project Pax, a cross-border stablecoin project bridged with SWIFT, involves the participation of Japan's three major banks

Successful Completion of RWA Testing, Continuing to Address Interoperability

It is worth noting that Swift has successfully conducted value transfer tests related to RWA, specifically mentioning two CBDC sandbox tests. Participating banks come from Europe, Asia, and North America, mainly utilizing smart contracts and event-driven programming to achieve payment automation.

In addition, Swift is making a new attempt to provide a single payment infrastructure for tokenized assets, aiming to solve the integration issues between digital assets and banking networks. Each financial institution exploring RWA may use different distributed ledger technologies, which hinder global interoperability. Coupled with differences in regulatory environments, this poses additional challenges.

SWIFT Completes Trade, Securities, and Forex Sandbox Experiments in "Connecting Digital Islands," with Taiwan also participating

Swift is actively embracing blockchain technology, providing a single entry point for financial institutions to transfer tokenized assets