The Society for Worldwide Interbank Financial Telecommunication (SWIFT) has been watching the development of fintech carefully, with a focus on its own future. After a variety of projects using new technologies, the pillar of the current international payments system has thrown its weight behind a unified ledger payment model.

SWIFT looked in particular at tokenization and the shared ledger model, according to a post on its website. Common infrastructure could provide real-time balance to all of the participants in the shared ledger, it said. That’s not to say messaging is unneeded, SWIFT was quick to add:

“Shared ledgers are not well suited to carrying and storing high volumes of data due to the way data is synchronised across parties and the computing power required. This is where a messaging layer fits in.”

“For transactions to be frictionless, additional types of data also need to be transferred to enable value-added services such as AML, compliance, sanctions screening, trade and accounts receivable reconciliation,” it continued.

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Rather than starting a unified ledger from scratch, SWIFT suggested the creation of a state machine — “a dynamic model that reflects the current state of transactions and balances across institutions” — that could be built on the ISO-20022 messaging technology already in use. It could work on a blockchain or on a centralized platform like SWIFT’s Transaction Manager.

Unified ledger technology has been embraced by the International Monetary Fund in its XC platform and by financial institutions participating in the Regulated Liability Network. The Bank for International Settlements has also endorsed the model.

SWIFT, which was founded in 1973, settled on the unified ledger model after considering several other options. In 2022, it teamed up with fintech Symbiont in a pilot project to upgrade its information delivery to corporate clients through Symbiont’s blockchain-driven Assembly platform.

SWIFT argued against the use of a unified ledger in a 2023 report in favor of SWIFT as a “single point of access” to different blockchain networks.

SWIFT plays a key role in the imposition of economic sanctions worldwide. In February 2022, at the beginning of the Russian invasion of Ukraine, the European Commission ordered the removal of an unknown number of Russian banks from SWIFT.

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