Ripple: SWIFT to test blockchain payments

  • SWIFT has entered a partnership with Symbiont in an effort to increase the accuracy of corporate action workflow.
  • With SWIFT already working with Ripple, some are speculating that the partnership will involve Ripple and XRP.

Society for Worldwide Interbank Financial Telecommunications (SWIFT), the world’s leading provider of secure financial messaging services has tapped into Symbiont to help it improve operational efficiencies in non-revenue generating activities for thousands of its users worldwide.

According to a Tuesday announcement, Symbiont, a leading technology company focused on providing turnkey solutions for complex global finance problems using blockchain will help SWIFT in increasing the accuracy of corporate action workflow.

With global transactions, interconnectivity, and corporate workflow becoming more complex, automated communication on issues such as dividend payments, mergers, exchange offers, auctions, and other corporate actions has become a  necessity.

Leveraging Symbiont’s enterprise blockchain platform, SWIFT will enable its institutional partners to share crucial information with investors, creditors, and other stakeholders in real-time slashing over 30 percent in costs and minimizing risks for market participants.

Under the new partnership, corporate action data from SWIFT messages will be translated by the SWIFT Translator and uploaded to Symbiont’s blockchain. Their smart contract technology can then compare information shared between participants and flag discrepancies, contradictions or inconsistencies across custodians in real-time.

“By bringing Symbiont’s Assembly and smart contracts together with SWIFT’s extensive network, we’re able to automatically harmonise data from multiple sources of a corporate action event,” said Tom Zschach, Chief Innovation Officer at SWIFT.  The program will be piloted for the next two weeks and stands to benefit SWIFT’s 11,000plus institutions across 200 countries immensely if all goes well.

This is the latest move by SWIFT in trying to harness the power of blockchain technology as it attempts to move beyond transmitting financial news. Previously, the money transmitter has stated that it wants to “fundamentally renew its cross-border infrastructure for the processing of payments and securities transactions” and embarked on various ventures aimed at onboarding blockchain technology.

Not an easy route

However, its ambitious plan puts it in stiff competition with players like Ripple. The blockchain route as an alternative to SWIFT has been brewing since around 2016 when Ripple publicly challenged SWIFT on cross-border payments. Already, Ripple, the blockchain firm behind XRP has been leapfrogging cross-border payments through its maiden ledger infrastructure. The blockchain firm also has a war chest of partners including Moneygram, Brazilian bank Travelex and Arabian behemoth coss-boarder payment service provider Tranglo.

Apart from heightened security features, Ripple boasts of considerably higher payment speeds of about 4-7 seconds and vastly cheap fees putting it ahead of other service providers. Despite SWIFT being a crucial linchpin of global finance and seeming ripe for disruption, its upgrade to blockchain could prove to be overdue given its largely outdated infrastructure.