Chainlink, a crypto and technology platform has partnered with the world’s leading provider of financial messaging services, SWIFT to conduct a proof-of-concept (POC) project that enables traditional finance companies to transact on blockchains.
On Sept. 28, Chainlink co-founder Sergey Nazarov and SWIFT strategy director Jonathan Ehrenfeld Solé announced the project at SmartCon 2022 in New York.
“SWIFT is using the Cross-Chain Interoperability Protocol (CCIP) in an initial proof of concept. CCIP will enable SWIFT messages to instruct on-chain token transfers, helping the SWIFT network become interoperable across all blockchain environments,” tweeted Chainlink.
SWIFT is using the Cross-Chain Interoperability Protocol (CCIP) in an initial proof of concept.
CCIP will enable SWIFT messages to instruct on-chain token transfers, helping the SWIFT network become interoperable across all blockchain environments.https://t.co/8GOBNhzwCk pic.twitter.com/Pvm0Cex45e
— Chainlink (@chainlink) September 28, 2022
Enabling SWIFT to Instruct Token Transfer in Any Blockchain
In a collaborative proof-of-concept, blockchain oracle Chainlink revealed SWIFT would be able to instruct token transfers across nearly all blockchain environments.
Sergey Nazarov said that the project will “enable the communications and movement of tokens between a number of different institutions.”
In addition, Chainlink noted that this would enable financial institutions to implement blockchain without having to face high upfront costs and challenges related to development.
Chainlink’s Cross-Chain Interoperability Protocol (CCIP) that was first announced in August 2021, will be used for the upcoming proof-of-concept.
Exploring Blockchain to Faster Payment Process
Globally, SWIFT connects over 11,000 banks for traditional cross-border fiat transactions. Daily messages recorded by the system averaged 44.8 million in August.
Nevertheless, SWIFT’s network can take several days to complete transactions, so it’s also researching blockchain and distributed ledger technology, as well as central bank digital currencies (CBDCs) to speed the payment process.
Meanwhile, in May, Mastercard CEO Michael Miebach said he does not expect SWIFT to exist within five years due to the rising competition from CBDCs.
Later, MasterCard retracted Miebach’s statement, noting that SWIFT’s operations would continue to evolve.