For the longest time, SWIFT has had a stranglehold on the cross-border value transfer market. Not anymore, with the advent of emerging technology such as blockchain challenging the dominance of the international banking conglomerate. And now, the Brussels-based organization has revealed that it’s set to launch its own blockchain-based cross-border transfers pending a successful proof of concept with blockchain consortium R3.
In a new paper written by the outgoing SWIFT CEO Gottfried Leibbrant, the organization recognized the aggressive nature of the competition in the payments industry. The paper, titled Payments: Looking into the future, described the current state in the payments industry as “do or die,” with banks being at risk of being overthrown as the default payment channels.
In its most important revelation, the paper stated that SWIFT is seeking to launch DLT-based systems for its Global Payments Innovation (GPI) platform. GPI is SWIFT’s response to the blockchain technology, enabling real-time payments for its clients.
The paper stated, “Pending the success of a proof of concept with the R3 trade platform, we’ll also soon be enabling gpi payments on DLT-based trade platforms. Resolving the payment challenges DLT platforms face, we will enable gpi payments to be initiated within trade workflows, automatically passing them on to the banking system.”
SWIFT announced the integration of GPI with R3’s Corda blockchain in January 2019. At the time, SWIFT said that integration of Corda would introduce speed, ubiquity and certainty of GPI to a blockchain platform for the first time.
It stated, “The Proof of Concept (PoC) addresses the need for e-commerce and trade ecosystems to be supported by global, fast, secure and transparent settlement using fiat currencies by enabling ‘off-ledger’ payment settlement based on gpi.”
And while blockchain-based remittance companies have continuously fought against the centralized entity, SWIFT has no intention of backing down. While the paper laid out the organization’s belief that decentralized finance is the future, it also made it clear that SWIFT expects to still be a critical partner to the banks and fintech companies.
“Cooperation by all players in the community is important, because the openness and universality of the envisioned system are unique; the more widely adopted the convention for moving value, the easier the circulation of value – and the more the convention will be used.”
Despite its GPI platform being only two years old, it has been a huge success. The paper revealed, “More than 55% of SWIFT cross-border payments are already being made via gpi, moving more than 40 trillion US dollars’ worth of payments across borders faster than ever before. Half of them are reaching end beneficiary customers within minutes, and practically all within 24 hours. Within two years, every cross-border payment will be a gpi payment.”
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