Swift successfully transfers tokens across blockchains in landmark experiment with Chainlink News โธ Technology
Swift successfully transfers tokens across blockchains in landmark experiment with Chainlink
Swift said it has successfully demonstrated that it can provide a single point of access to multiple networks using existing infrastructure.
2 min read
Updated: Aug. 31, 2023 at 3:27 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
ย Global financial messaging network Swift has announced the successful completion of a tokenization experiment, which involved the transfer of tokens across multiple blockchains.
The interbank messaging infrastructure disclosed this in an Aug. 31 press release, noting that it collaborated with Chainlink and several financial institutions for the experiments.
Financial institutions that participated in the experiment include BNY Mellon, BNP Paribas, Lloyds Banking Group, Citi, New Zealand Banking Group Limited, Euroclear, and others.
Swift connected to Ethereum’s (ETH) Sepolia testnet for the experiment and used Chainlink’s (LINK) Cross-Chain Interoperability Protocol (CCIP) to send tokenized assets to the different public and private blockchains.
Beyond showing that financial institutions could use Swift to connect to different blockchains, the experiment also used the interoperability protocol for transferring data securely to other blockchains.
“Swift has successfully demonstrated that it can provide a single point of access to multiple networks using existing, secure infrastructure, thereby significantly reducing operational challenges and investment required for institutions to support the development of tokenised assets.”
What does this mean for tokenization?
Swift described the experiment’s success as a significant step for tokenization, noting that the findings could be used to remove the friction that has slowed the growth of the tokenized assets market.
The friction here is the need for interoperability between blockchain networks, which poses a significant operational and investment challenge for institutions. Solving that problem could open the floodgates for institutional adoption of tokenization.
The firm noted that 97% of institutional investors believe tokenization will revolutionize asset management. Results such as this could prove monumental for tokenization to live up to its potential.
Speaking on the experiment, the Chief Innovation Officer at Swift, Tom Zschach, said:
“Interoperability is at the heart of everything we are doing at Swift to facilitate the seamless flow of value across the world in the face of increasing fragmentation.”
The financial institutions participating in the experiment expressed optimism about the success. For them, it represents a potential opportunity that will be explored in the future.
Chainlink co-founder Serge Nazarov believes that “there will be greater adoption of digital assets across the entire banking industry, and that this adoption will happen using multiple different blockchain technologies at the same time.”
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Chainlink is a decentralized oracle network that connects smart contracts on the blockchain to real-world data.
