Swift Network Collaborates with ConsenSys for Real-Time Cross-Border Payments

The Swift network connects over 11,500 financial institutions globally. ConsenSys, a key player in the Ethereum ecosystem, is teaming up with around 30 companies to develop prototypes for “real-time 24/7 year-round cross-border payments.”

Among these companies are prominent names like Bank of America, Citibank, Deutsche Bank, JP Morgan Chase, and Wells Fargo.

According to a press release, “Ledger, a secure, real-time log of transactions between financial institutions, aims to establish rules for recording, sequencing, and verifying transactions, while enforcing these rules through smart contracts.”

However, it’s unclear whether the prototypes are being built on the Ethereum Mainnet or a Layer-2 framework known as Linea. Swift did not respond to inquiries about this from Decrypt, and ConsenSys has stated it won’t provide further details right now.

Interestingly, ConsenSys stands out as one of 22 investors that operate independently.

The company elaborated in a blog post that the collaboration to enhance the network with Swift’s blockchain infrastructure marks a pivotal moment for both traditional and decentralized finance, emphasizing that this is more about convergence than conflict.

It’s worth noting that Swift’s primary function is as a messaging system rather than a payment platform. It doesn’t actually hold or settle customer funds. Instead, it facilitates communication between banks, brokerages, and other financial institutions about transaction details, like the amount and currency being transferred as well as the recipient.

The Swift Network serves 11,500 institutions across over 200 countries. A report from Citi reveals that in 2022, its rapid messaging handled an average net value of approximately $7.5 trillion daily.

If this prototype eventually permits even a fraction of the Swift network’s volume to be processed on-chain, it could yield significant benefits. Currently, Swift processes around 53 million financial messages daily.

In contrast, Ethereum’s Mainnet managed about 1.4 million transactions just yesterday, according to Etherscan. If merely 6% of Swift’s volume were to transition to Ethereum, it would effectively double the network’s capacity.

When looking at Linea, which launched its Mainnet in 2023, the disparities are even starker. On a recent Sunday, it processed only 145,000 transactions, accounting for a mere 0.51% of Swift’s total volume.