Swift is building a blockchain platform to modernize international payments amid growing competition from stablecoins.
According to the Financial Times, the payments cooperative has joined forces with banks such as Bank of America, Citigroup, and NatWest to create a blockchain that enables instant, continuous transaction validation across borders.
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This move is designed to streamline global transfers and reinforce Swift’s role in a digital payments landscape increasingly dominated by stablecoins.
Swift’s Blockchain Project Responds to Stablecoin Pressure
Stablecoins, digital assets pegged to fiat currencies, have surged in popularity, offering low-cost, direct transfer options outside traditional banking channels.
The sector, estimated at $300 billion, threatens established payment networks by eliminating intermediaries and reducing transaction times. Swift’s response is to implement a blockchain that can sequence, record, and verify tokenized transactions, including stablecoins, using smart contracts to enforce transaction rules.
Swift has partnered with Consensys, a blockchain technology firm led by Ethereum co-founder Joseph Lubin, to develop and test the new shared ledger.
Related: Coinbase to List First Singapore Dollar Stablecoin in Collaboration with StraitsX
The prototype will undergo trials with participating banks to determine suitable currencies and transaction corridors for initial rollout. The collaboration signals a significant step for Swift in embracing blockchain technology for mainstream banking operations.
Banking Sector’s Digital Token Strategy
The push for blockchain comes as regulators and banks globally explore digital currencies. Recent US legislation introduced in July regulates stablecoins closely, prompting banks, including JPMorgan Chase and Citigroup, to consider issuing proprietary stablecoins.
Meanwhile, nine European banks, led by UniCredit and ING, reportedly plan to launch a euro-backed stablecoin by mid-2026, aiming to offer an alternative to dollar-denominated digital tokens.
Alongside blockchain development, Swift is working to enhance payment transparency with new measures to guarantee fee predictability and instant settlement for retail transactions.
These changes respond directly to stablecoin attributes, which prioritize speed and low cost. They provide users with full transaction value and clarity on pricing.
The popularity of stablecoins is on the rise even as the regulations catch up. Recently, the Australian Securities and Investments Commission introduced temporary licensing exemptions for intermediaries that distribute stablecoins issued by licensed entities.
The intermediaries distributing stablecoins issued by an Australian financial services licensee are reportedly not required to obtain their own AFS, market, or clearing and settlement facility licenses.
