SWIFT is preparing to integrate financial information technology and blockchain. Li Qiyuan and other industry insiders responded

If SWIFT integrates blockchain, what will be the consequences for global banking services and cryptocurrencies? Wim Raymaekers, head of SWIFT’s banking and treasury markets, made a statement, and experts from around the world gave their opinions to CoinTelegraph.

According to Raymaekers, the international secure financial messaging service provider will integrate the latest achievements in financial information technology, including blockchain, to achieve faster and more transparent cross-regional payment services. International Financial Times reported that SWIFT plans to launch a trial version in early 2016.

Wim Raymaekers says:

“We could see a shift in correspondent banking clearing, perhaps using blockchain technology to replace bilateral correspondent accounts.”

Raymaekers pointed out that blockchain technology can be used in a variety of different areas, such as securities, but he reminded that this is a strategic roadmap that banks need to develop. He suggested that banks integrate it into existing systems to maintain maximum compliance and control.

Integrate the latest technological achievements into existing systems

CoinTelegraph decided to see what the future of such an experiment might look like, and consulted top experts in the blockchain and Bitcoin field around the world, including in the United States, China, the United Kingdom, Greece, Italy, Canada and India.

Andreas M. Antonopoulos, a security and distributed systems expert, said SWIFT has not yet fully understood blockchain technology and Bitcoin’s open source code. He said:

“SWIFT chose a closed access point, centralized, fragile, insecure, permissioned, and backward solution because they could not accept that we are in a world where finance is open access, open source, decentralized, global, reliable, secure, permissionless, and advanced, like Bitcoin. They wasted countless dollars on a dead end, training thousands of developers who would eventually move to open source systems. SWIFT essentially supported Bitcoin’s design pattern, but completely misunderstood its value. So Bitcoin won.”

Meanwhile, Bobby Lee, CEO of BTCC, welcomed SWIFT’s interest in blockchain, but warned:

“Blockchain is a great technology, and I’m glad SWIFT is interested in it. But I would caution them not to get too excited: the Bitcoin blockchain is so revolutionary and so widely used because it is decentralized. Anyone can participate in the blockchain by confirming blocks with the hash power of their computers. So unless their new blockchain solution is open to everyone, they will just be a private database, not a revolutionary application of blockchain.”

Manie Eagar, co-founder of the Digital Finance Institute and board member of the Canadian Bitcoin Alliance, reminds us that there are a number of guilds and cutting-edge financial research institutes that are quietly but rapidly developing blockchain prototypes from the early technical foundations of the Bitcoin blockchain:

“This includes blockchain platforms and applications ranging from permissioned to permissionless, and from private to public. We are now studying almost all applications in the industry, from the Internet of Things to interbank foreign exchange transactions, remittances, payment processing and settlements.

SWIFT has long expressed its interest in blockchain, and for the benefit of its customers, it sees blockchain as a tool to improve identity, security and compliance, related governance and risk management, thereby enabling safer and more efficient interbank payments, ultimately benefiting global customers.”

Manie Eagar mentioned that SWIFT undertook some prototype development work and commissioned research and development earlier this year, and the satisfactory results further stimulated their interest and launched further investment and investigation.

“There are a number of major banks contributing their expertise under the R3 banner to support standardization and distributed blockchain applications, helping to explore the benefits and developments at different levels of the blockchain value chain. In 2016 we will see the fruits of this research and development work, and on the other hand, it will attract a number of financial information technology startups and investors.”

Adam Vaziri, the Bitcoin legal representative at the UK Digital Currency Alliance, said:

“I don’t think this is groundbreaking, but more of an adjustment for survival. At the same time, there is perhaps no better institution than SWIFT to apply blockchain technology because they manage the payment channels of the global banking system. It is natural for them to promote the use of bank shared accounts, which is an obvious and important step.”

According to Wim Raymaeker, “Enabling cross-regional nostro accounts involves both the messaging layer and the settlement layer.” Adam Vaziri commented:

“Looking forward: nostro accounts will become history, as will correspondent banking. In the future, banks will issue digital tokens to their clients to transact on a P2P level - no clearing, no correspondent banks. In the future, correspondent banks will be redeeming institutions (who have agreements with banks) that accept credit tokens issued by banks in exchange for local cash. SWIFT needs to build those protocols if it is to be successful further.”

Vishal Gupta, founder of the Indian Bitcoin Alliance, expressed optimism about SWIFT’s attempt:

“It is exciting to see SWIFT plan to integrate blockchain technology into their systems as early as 2016, which is the best support yet for distributed ledgers on the blockchain. This is the first step towards establishing a common architecture for the global financial system, which will save costs and time for customers and banks.”

Luca Dordolo, owner of Italy’s first Bitcoin ATM, also noted that banks are beginning to realize that revolutionary technology can overwhelm ancient dogma:

“I hope there will be a new understanding and perception of the financial and banking world. As awareness grows, the banking system begins to realize that they can’t waste any more time, otherwise the new transaction verification and account system called blockchain will overturn the old rules. The prospect of faster cross-regional transactions is very tempting, but I think it is not a simple matter to merge SWIFT’s need for inter-bank transparency and trust with the behavior of blockchain. Blockchain is built on a huge platform for sharing information. In this way, trust and transparency are achieved.”

Although SWIFT has not yet made an official statement on how to implement modern financial technologies in the system, the remarks made by SWIFT’s head of banking and treasury markets indicate the growing interest of traditional financial institutions and organizations in blockchain and Bitcoin.

Original text: bt.cc/mnb6

Translator: gsj