Swift's blockchain-based ledger is operational for live payments, but banks cannot connect without first building internal digital-asset infrastructure, according to Lamine Brahimi, co-founder of custody and tokenization firm Taurus.
To connect to Swift's ledger, banks must have three components: a permissioned ledger that interacts with Swift's system, wallet capabilities, and tokenization and smart-contract functionality that integrates with Swift's smart contracts, Brahimi said in an interview.
Swift's ledger functions as an orchestration layer rather than a replacement for banks' internal systems. It enables round-the-clock, cross-border transfers of tokenized deposits while final settlement continues through existing arrangements.
Early Live Transactions Demonstrate Speed
HSBC and Standard Chartered completed the first interbank transaction on Swift's ledger in August. DBS and Citi later executed a weekend cross-border dollar payment in minutes, compared to the typical two business days required through traditional rails.
Swift announced in July that 17 banks were preparing live tokenized-deposit transactions as part of its effort to modernize its messaging system, which has processed payments of up to $1.5 quadrillion annually since the 1970s.
Infrastructure Requirements as Design Feature
Brahimi characterized the need for additional infrastructure not as a weakness but as a deliberate design choice that gives banks flexibility. The ledger provides institutions with an option between existing payment systems and tokenized deposits that can move continuously.
Taurus announced its Swift integration in August and provides all three required infrastructure layers through a single platform. Brahimi noted that competing solutions may require banks to engage multiple vendors for the same functions.
The infrastructure requirement also explains why tokenized deposits remain primarily an institutional product. While banks have used internal tokenized-deposit systems for years, interbank transfers require shared standards and compatible systems on both sides. Before Swift's announcement, tokenized deposits saw limited use outside large institutions with significant global scale.
Swift's model keeps deposits on banks' balance sheets, distinguishing them from stablecoins issued outside the banking system. The ledger offers banks a standardized approach to providing 24/7 payments without abandoning existing infrastructure.
