How Swift is enabling the future in finance
Swift was set up to make it simpler for financial institutions to transact with each other across the world. Since being established in 1973, Swift has adapted as various new technologies have emerged. Its network is agnostic to which currencies its members transact in, and in its lifetime it has seen the demise of some forms of value and the introduction of new ones – for example when the Euro was introduced in Europe.
How Swift is enabling the future in finance
With that in mind, it’s not surprising that as the financial industry explores new digital forms of value, such as Central Bank Digital Currencies (CBDCs), stablecoins, and tokenised assets, Swift is adapting again.
Against a backdrop of a majority of central banks exploring digital currencies, and commercial banks showing interest in digital assets, Swift has been working for some time – and proving that its global network will continue to play a critical role in keeping the world connected as new forms of value mature and seek to scale.
Keeping the global financial system connected
There are numerous projects around the world focused on digital assets. Some are exploring new networks for a regionalised group of markets; while others have taken off – for instance, CBDCs have been launched in countries including China and Nigeria.
The question is, how does a country with a digital currency transact with a country without one?
That’s where Swift’s experiments are critical. They have shown that Swift can interoperate new forms of value with one another, but also with traditional fiat currencies, too. So, a business in China could sell goods to a buyer in the UK, where there is no digital currency, as well as with Nigeria, where there is a different CBDC in usage.
As new forms of value are developed, they are typically being built on different technologies, with different sets of rules. Left untouched, this risks having a negative impact on the speed and cost of cross-border transactions. Research by Economist Impact has suggested financial fragmentation could wipe as much as 6% off global GDP.
The financial ecosystem is already complex. Swift is working to ensure the benefits of digital assets can be realised, while ensuring the financial community can continue to send value securely and seamlessly across the world.
Swift’s reach extends to more than 220 countries and territories. It’s an inclusive network with a reputation for trust among the financial community. And with digital assets developing at a rapid pace, Swift’s role in keeping global economies connected is arguably more important than ever.