Swift said on October 22, in its Sibos recap, that the Swift ledger is ready for initial use, with 17 banks piloting live cross-border payments in tokenised deposits and more than 100 banks signed up to its payments scheme. The ledger matches and nets obligations between banks, and settlement stays “under banks’ control on existing payment rails”. The correspondent banks keep the deposits, the float and the liquidity, and Swift changes the hours they work.
What the Swift ledger pilots have done
The 17-bank figure is not new. Swift first gave it in July, when it said the ledger was ready and banks on six continents were preparing live transactions. HSBC and Standard Chartered completed the first live interbank transaction on August 19, and DBS and Citi later sent a weekend dollar payment in minutes instead of up to two business days, CoinDesk reported.
DBS, OCBC and UOB then ran the first live Singapore dollar transactions on the ledger. In the UOB description, payment messages went over the ledger, each bank recorded the resulting obligations on its own tokenised-deposit system, and the ledger matched and netted them “prior to final settlement through existing systems”. ANZ, Citi and BHP followed with US dollar payments between Melbourne and New York, with BHP using its normal ANZ account, Finextra reported on October 6.
Swift’s ledger page lists 12 banks that have piloted live transactions, including ANZ, BNY, FirstRand and MUFG, inside a coalition of more than 40 banks from 16 countries. The ledger sits beside Swift’s payments scheme, which will next let customers pay to a phone number or email address instead of full account details, according to the Miami conference recap, which counted almost 11,000 delegates. Joining the ledger takes work on the bank’s side. Taurus co-founder Lamine Brahimi told CoinDesk that a bank needs its own permissioned ledger, wallet tools and smart-contract capability before it can connect.
Correspondent banks keep the float
A tokenised deposit is a claim on the bank that issued it. The Swift ledger does not carry central bank money or a token issued by a third party, and when it nets an obligation, the banks still settle through their existing accounts and domestic systems. Nostro balances, intraday liquidity and the foreign exchange desk stay where they were. What changes is operating hours and visibility, since a payment between two connected banks no longer waits for Monday and the sending and receiving banks can both see where it is.
That design suits the banks Swift serves. GL Insight argued in February that Swift remains the hegemon of cross-border payments because banks trust a network built around them. The ledger carries that trust into tokenised money, and it gives correspondent banks a reply to bank-issued stablecoins and to the token networks Visa wants to settle. A corporate client keeps its account, its bank and its credit lines, and ANZ described the tokenised deposits as “completely invisible to customers”.
BLOOM is building the wider version
Singapore’s BLOOM initiative, which Malaysia and Thailand joined on October 23, works on settling tokenised deposits and regulated stablecoins across borders, with Visa, Mastercard and Ripple among its members. The BIS has argued for tokenised central bank money as the settlement layer under all of it. Swift’s ledger is the narrowest of the three designs, with bank money only, coordinated on a shared ledger and settled through the systems banks already use.
The narrow design has a cost. A stablecoin payment is final when it lands on-chain. On the Swift ledger, netting can happen on a Sunday, but Swift has not published how final settlement works when a domestic system is closed, and that detail decides how much of the 24/7 promise reaches clients. For a treasurer moving money between two large banks that both run tokenised deposits, the bank route may be enough. For a payment that ends at a smaller bank outside the coalition, the old chain of correspondents still applies.
Bottom line
Swift has put tokenised deposits into live use without moving settlement or deposits away from correspondent banks, which keeps the economics of cross-border banking where they are and fixes the hours. More cross-border payments coverage sits on the GL Insight hub.
Watch for:
- How many banks are live beyond the 17 in the pilot by year-end
- The first corporate clients receiving ledger payments in their own treasury systems
- Swift detail on final settlement when domestic systems are closed
