Global bank messaging network SWIFT will trial live transactions of tokenised assets and digital currencies next year, it said on Thursday, the latest step in the currently slow-moving integration of such assets into the wider financial system.
Banks and asset managers have been exploring “tokenising” traditional assets like bonds for several years. They hope that by using digital units – usually blockchain-based tokens that represent a share of the underlying asset
– trading can be quicker, cheaper and more efficient, including by cutting out middlemen involved in many transactions. So far, however, these have failed to gain substantial traction in the wider market.
Around 90% of the world’s central banks are also testing central bank digital currencies (CBDCs), digital versions of fiat money, that facilitate trading of tokenised assets. Monetary authorities are trying to get on top of technological advances that have enabled cryptocurrencies like bitcoin.
SWIFT, which plays a crucial role in global banking, has been engaged in trials of both CBDCs and tokenised assets. In March said it would launch a new platform to connect CBDCs currently in development to the existing financial system.
