SWIFT, Linea, and Interbank Messaging: A New Era?

SWIFT explores blockchain with Linea for interbank messaging, signaling a potential shift in global finance. Major banks are testing the waters.

SWIFT, Linea, and Interbank Messaging: A New Era?

SWIFT is diving into blockchain, selecting Linea for a pilot to explore moving its messaging system on-chain. Major banks are participating in the trial to explore how blockchain could improve interbank communication.

Why Linea? Privacy and Compliance

Linea's focus on privacy and compliance makes it a great choice for SWIFT's blockchain initiatives. The network prioritizes privacy through advanced cryptographic proofs, designed to enable banks to innovate while remaining fully compliant.

SWIFT's Blockchain Journey

SWIFT is testing blockchain to make payments faster, increase transparency, and enable more automated processing, all while maintaining strict regulatory oversight. SWIFT has previously explored blockchain and said that banks will begin live tests of digital instruments and transactions on its network this year. The organization is also developing an interbank token.

Challenges and Competition

The project still has several months before going live, and it will need to address key challenges. Competition in international payments is increasing. Ripple has promoted its blockchain network as a faster and lower-cost alternative to SWIFT’s traditional system. These developments show how both networks are turning to blockchain to adapt to evolving payment needs.

Banks Are Paying Attention

For big names like BNP Paribas and BNY Mellon, this is more than tinkering with new tech. If blockchain-based messaging works, it could merge communications and settlement into a single, seamless layer. That means lower costs and fewer delays.

My Take

Integrating blockchain into existing systems will require time, investment, and regulatory patience. Questions remain around how such a system would perform at the scale SWIFT operates, and whether regulators across the US, EU and Asia would be comfortable with it.

SWIFT has always moved carefully. Over the past few years, it has tested APIs, dabbled with AI to fight fraud, and explored tokenized asset transfers. Partnering with Linea fits this pattern: try a controlled, private environment before scaling anything to the public. If the pilot succeeds, it could become one of the largest real-world blockchain deployments yet.

So, SWIFT and blockchain? It's like your grandma learning TikTok – unexpected, but potentially revolutionary. Keep an eye on this; it might just change how money moves around the world!