SWIFT to trial tokenized asset transactions in 2025

SWIFT will trial live transactions of tokenized assets and digital currencies in 2025, aiming to integrate blockchain-based tokens into the broader financial system.

Global financial messaging network SWIFT will trial live transactions of tokenized assets and digital currencies in 2025, a step towards broader adoption of blockchain-based finance, according to a Reuters report published Oct. 3.

Banks and asset managers have long explored tokenizing assets such as bonds, hoping that blockchain technology would make trading easier and reduce costs by eliminating intermediaries. But these efforts have struggled to gain traction in the broader market.

SWIFT has been involved in trials of central bank digital currencies and tokenized assets. The network’s latest initiative aims to combine these innovations with traditional banking; SWIFT says it reflects growing industry demand for real-world digital asset transactions.

“To successfully execute and clear a tokenized security transaction, you need cash, and that’s where tokenized deposit or wholesale CBDC comes in. It’s not enough to have just delivery or just payment, you need both.”

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While 90% of the world’s central banks are exploring digital currency options, SWIFT’s new platform, expected to launch in the next one to two years, aims to integrate CBDCs into the financial ecosystem. The organization believes that successful trading and clearing of tokenized securities requires both tokenized deposits and wholesale CBDCs, ensuring that payment and delivery are equally supported.

However, despite SWIFT’s integration efforts, not all countries are in a rush to develop digital currencies. Concerns remain about technological and regulatory hurdles, as highlighted by the Riksbank in Sweden, highlighting the need for comprehensive technical and regulatory developments to ensure that offline payments with e-krona are secure.