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SWIFT explores blockchain as part of global payments innovation initiative

First Published 13th January 2017

Proof of Concept launched to determine if distributed ledger technology could help banks reconcile their nostro databases in real time.

Wim Raymaekers, SWIFT.

Wim Raymaekers, SWIFT.

Brussels - SWIFT has launched a Proof of Concept (PoC) to explore whether distributed ledger technology (DLT) can be used by banks to improve the reconciliation of their nostro databases in real time, optimising their global liquidity.

Under the current correspondent banking model, banks need to monitor the funds in their overseas accounts via debit and credit updates and end-of-day statements. The maintenance and operational work involved represents a significant portion of the cost of making cross-border payments. This PoC will test whether distributed ledgers may be able to help banks reconcile those nostro accounts more efficiently and in real time, lowering costs and operational risk.

The new PoC was scoped in collaboration with leading correspondent banks. SWIFT gpi member banks can apply to participate in this PoC, set to launch in early 2017.

"Whilst existing DLTs are not currently mature enough for cross-border payments, this technology, bolstered by some additional features from SWIFT, may be interesting for the associated account reconciliation," says Wim Raymaekers, Head of Banking Market and SWIFT gpi at SWIFT.

SWIFT will deploy open-source Hyperledger technology, and combine it with key SWIFT assets to bring it in line with the financial industry's requirements. Using a private blockchain in a closed user group environment, with specific user profiles and strong data controls, user privileges and data access will be strictly governed.