Late last year SWIFT said it was conducting a tokenized asset pilot with Clearstream, Northern Trust, SETL and others. Today it was announced that the blockchain pilot concluded successfully. It linked tokenization systems between central securities depositories (CSDs) and global custodians.
Across multiple networks running different technologies, tokens were issued, settled on a delivery versus payment basis, and redeemed. Settlement was executed both conventionally and with central bank digital currency (CBDC).
In the same way that SWIFT currently provides the glue for cross border payments, it wants to create a common interface to enable the tokenization of assets to take off. We’ve already seen numerous tokenization platforms launch. The risk is that each becomes a new silo of assets. Investors and asset managers shouldn’t have to integrate with numerous different platforms. That would defeat a key benefit of blockchain in reducing friction. Hence SWIFTs search for an interoperability solution. It also recently announced a proof of concept with Chainlink Labs to link to several public blockchains.
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