SWIFT Blockchain Pilot Shows Promising Results, Rivaling Competitor Ripple

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Less than a week ago, SWIFT published the final results from its distributed ledger technology (DLT) proof of concept (PoC) on Nostro account reconciliation. The pilot saw 34 banks participating and using the SWIFT DLT platform. The project was intended to assess whether SWIFT was up to the task of managing interbank payments and standing within the regulatory confines of the financial industry.

In a nutshell, SWIFT produced their own unique DLT solution, which facilitated the sharing of private information between Nostro Account owners and intermediary banks. The platform recorded all transactions conducted on their Nostro accounts in an attempt to increase efficiency in the transaction process.

According to the SWIFT team:

the PoC evidenced the considerable pre-requisites for such a solution to be adopted by the industry – for instance, all account servicers would first need to migrate from batch to real-time liquidity reporting and processing’.

Though the adoption of DLT remains narrow, the initial success of the program has caught the attention of the wider industry.

The validation of the PoC has led SWIFT to have gained serious ground against financial blockchain competitor Ripple. Ever since Ripple launched its own blockchain efficient payments system with ‘sub second cross-border payments’, the company has developed a name for itself leveraging blockchain to improve its payment processing efficiency.

As SWIFT has more than 11,000 institutions using its technology and its blockchain platform has been successfully proofed, it looks set to collide with Ripple’s solution. For now Ripple remains in a key position within the DLT interbank transactions sector but is unclear how long this will last particularly as SWIFT is embracing digital disruption in the form of blockchain.

As companies like SWIFT leverage blockchain technology to minimize manual account handling and other antiquated internal processes, both commercial banks and consumers will enjoy a much faster standard of service. After all monitoring transactions through an intermediary is no match for a centralized distributed ledger.

SWIFT recognizes that it is only a matter of time before the financial industry openly adopts blockchain technology. As a result, it makes sense for the company to launch their own DLT platform to reinforce their market dominance and displace rival Ripple.

Though SWIFT has a long way to go before its blockchain infrastructure can manage widespread interbank transfers, the success of the PoC has suggested that its DLT solution has a promising future. It is also another brick in the wall in the effort to prove blockchain standing as a secure financial payments solution alternative.

Tim is a Tech and B2B Content Writer who’s developed a passion for reading on all things blockchain and cryptocurrency. He’s always looking for the next opportunity to write on disruptive technologies.

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