- Swift has announced that it will partner with prominent banks and Chainlink, to experiment with linking private and public permissionless blockchains.
- Chainlink will function as an enterprise abstraction layer to establish a connection between Swift and the Ethereum Sepolia networks.
In a press statement released on Tuesday, the Society for Worldwide Interbank Financial Telecommunication (Swift) revealed that it will work with prominent banks and Chainlink, a Web3 infrastructure provider, to experiment with linking private and public permissionless blockchains.
Swift, a widely used global financial messaging system for international money and securities transfers, began conducting tests in 2022 to investigate how private blockchains used by financial institutions can work together with tokenized assets. Expanding on this previous endeavor, Swift is now broadening the range of its experiments to include public blockchains. Moreover, Swift will leverage Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to support this expansion.
In the statement, Jonathan Ehrenfeld, who serves as the head of securities strategy at Swift, stated, “More institutions are beginning to explore how to serve customers on both permissioned and public blockchain networks like Ethereum.” The partnership involves prominent financial institutions such as BNP Paribas, BNY Mellon, Citi, Euroclear, SIX Digital Exchange (SDX), and The Depository Trust & Clearing Corporation (DTCC).
The experiments will examine how companies can utilize their current Swift infrastructure to effectively facilitate the transfer of tokenized value across various public and private blockchain networks.
What Will The Experiment Entail?
The experiments will showcase three specific use cases, with the initial one involving transferring tokenized assets between two wallets within the same open blockchain network (specifically, the Ethereum Sepolia testnet). The second use case focuses on transferring tokenized assets from a public blockchain like Ethereum to a permissioned blockchain. The third use case will also involve testing the transfer of tokenized assets from Ethereum to another public blockchain.
To establish connectivity between Swift and the Ethereum Sepolia networks, Chainlink will serve as an enterprise abstraction layer. Meanwhile, the Cross-Chain Interoperability Protocol (CCIP) of Chainlink will enable seamless interoperability between the source and destination blockchains.
According to Sergey Nazarov, the Co-Founder of Chainlink, “ It’s clear that as banks endeavor to access multiple blockchains, a common connectivity layer across the various chains will be a critical building block for their adoption of on-chain finance.”
Chainlink is working with @swiftcommunity and more than a dozen major financial institutions on experiments to enable connectivity to and interoperability across public and private blockchains: https://t.co/TphsIU6A3O
These experiments are a significant step forward from the… pic.twitter.com/6UEvp22LM9
— Chainlink (@chainlink) June 6, 2023
Chainlink will function as an enterprise abstraction layer to establish a connection between Swift and the Ethereum Sepolia networks. In addition, the Cross-Chain Interoperability Protocol (CCIP) of Chainlink will facilitate comprehensive interoperability between the source and destination blockchains.
Furthermore, according to the statement, integrating the two firms will enhance the collection of non-technical factors regulated institutions must address when interacting with public blockchain networks and participating in cross-network transactions.
These considerations will encompass various operational, compliance, and regulatory challenges. Specific areas of focus include the confidentiality and privacy of data, as well as liability and recourse implications associated with conducting transactions within public blockchain environments.
