Chainlink bulls have long touted their excitement for potential developments with SWIFT, as the two have served as long-standing (but mostly veiled) partners. SWIFT serves as one of global banking’s biggest players, and in an announcement this week, the global financial firm shared a new proof-of-concept project that will utilize a Chainlink protocol to trial SWIFT transactions on-chain.
Let’s look at what we know from the new announcement and how it could impact traditional financial transactions in the future.
Chainlink & A Cross-Chain Future
“The future is cross-chain.” It’s a statement you’ll hear from many crypto advocates regardless of their preference of specific blockchains. It’s a clear vision here from the teams at Chainlink and SWIFT, respectively. At Wednesday’s ‘SmartCon 2022‘ event, a two-day web3 event hosted by Chainlink in New York City, representatives from both Chainlink and SWIFT sat down and announced jointly that SWIFT is working on a cross-chain interoperability protocol (or CCIP) as an initial proof of concept for SWIFT transactions. The announcement was shared via YouTube and across social channels as well.
Chainlink (LINK) is venturing on a new endeavor with SWIFT that brings cross-chain utility to traditional global payments systems. | Source: LINK-USD on TradingView.com SWIFT’s Role
SWIFT is a critical pillar in global financial transactions. The Belgium-based SWIFT (which stands for the Society for Worldwide Interbank Financial Telecommunication) is responsible for the execution of financial transactions and payments between banks across the globe. Massive financial transactions that are conducted over country lines rely heavily on SWIFT’s infrastructure to execute. Many capital markets and financial institutions that do international business are likely using SWIFT infrastructure almost daily.
That makes today’s news a big win for Chainlink, who have worked on various projects with SWIFT thus far – but nothing quite at this level. SWIFT’s journey into this concept CCIP could serve as the first step into merging TradFi infrastructure with digital asset infrastructure, with interoperability at the forefront. The CCIP will look to provide a standardization across applicable blockchains, and could offer SWIFT-integrated banks across the globe the ability to easily transfer tokens.
There are still a wide variety of challenges and hurdles to overcome when it comes to cross-chain integration. We’ll see if Chainlink and SWIFT can make strides on international digital asset transactions in the months to come.
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