SWIFT, the interbank messaging platform that allows cross-border payments, announced its partnership with Chainlink, a provider of price feeds and other data to blockchains, on Wednesday, September 28, to work on a proof-of-concept (POC) – a cross-chain interoperability protocol (CCIP) would allow traditional financial institutions to trade across several blockchain networks.
Sergey Nazarov, co-founder of Chainlink, and Jonathan Ehrenfeld Solé, the director of SWIFT strategy, announced on September 28 at the SmartCon 2022 Conference in New York.
The project aims to allow traditional finance (TradFi) players to access traditional and digital assets on one network; the initiative will connect SWIFT’s network to almost every blockchain.
Over the past few months, the need for interoperability has grown significantly, and it has been hailed as the next major leap for both cryptocurrency natives and TradFi investors going into digital assets.
The success of the collaboration between Chainlink and SWIFT on CCIP may be attributed, in part, to institutional investors’ undeniable interest in investing in digital assets, according to Jonathan Ehrenfeld Solé, Strategy Director, who made this statement at the conference.
He continued by saying that participants in traditional finance want to access traditional and digital assets on a platform that can link different asset types. He added that the partnership between SWIFT and Chainlink on the cross-chain interoperability would significantly help TradFi institutions bridge the gap between digital and traditional assets.
According to Nazarov, the PoC will speed up the acceptance of distributed ledger technology (DLT) blockchains across multiple traditional financial and capital markets by utilizing Chainlink’s CCIP, which enables SWIFT messages to direct token transfers across practically every blockchain network.
In addition, over 11,000 banks are connected through the SWIFT interbank messaging system, and it is the most frequently utilized platform for conventional cross-border fiat transactions.
However, it can take several days for transactions on the SWIFT network to finalize; therefore, the company has been looking into DLT, blockchain technology, and central bank digital currencies (CBDCs) to allow faster payments.