The global banking messaging network SWIFT announced on Thursday that it will begin trials of live transactions involving tokenized assets and digital currencies next year. This move marks a significant advancement in the gradual integration of these assets into the broader financial ecosystem.
Banks and asset managers have been investigating the concept of “tokenizing” traditional assets such as bonds for several years. By utilizing digital units—often blockchain-based tokens representing a share of the underlying asset—they aim to make trading faster, more affordable, and more efficient, particularly by eliminating intermediaries commonly involved in many transactions.
However, despite these efforts, tokenized assets have yet to achieve substantial traction in the market. Currently, approximately 90% of the world’s central banks are also exploring central bank digital currencies (CBDCs), which are digital versions of fiat money designed to facilitate the trading of tokenized assets. These monetary authorities are keen to keep pace with technological advances that have led to the emergence of cryptocurrencies like Bitcoin.
SWIFT has actively participated in trials for both CBDCs and tokenized assets. In March, the organization announced plans to launch a new platform that would connect developing CBDCs to the existing financial system.
“Now we see industry demand to move out of that trial phase and see a digital asset really move, and have a counterparty pay them in real money against that,” stated Nick Kerigan, SWIFT’s head of innovation. “That’s the stage that we are moving to next year, albeit in a controlled way.”
Despite the considerable potential of this initiative, the fragmented nature of the market poses a challenge, with very few projects advancing beyond banks’ internal systems. Similarly, central banks are conducting tests of wholesale CBDCs for cross-border payments, but these are typically limited to small groups.
The latest SWIFT initiative seeks to integrate various types of digital assets across different platforms. “To successfully trade and settle a tokenized bond transaction, you need the cash, and that’s where a tokenized deposit or wholesale CBDC comes in,” Kerigan explained. “It’s not sufficient to have just delivery or just payment; you need both.”
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