SWIFT to Enable Crypto Transactions for Banks in 2025

SWIFT to Enable Crypto Transactions for Over 11,000 Banks in 2025

SWIFT, the global interbank communication network, is set to allow more than 11,000 financial institutions to process digital asset transactions through its system starting next year.

According to a statement from SWIFT, this new functionality will be rolled out in North America, Europe, and Asia. The organization describes the 2025 initiative as a pilot program designed to test the system’s viability on an international level.

A Continued Trend Towards Absolute Money

SWIFT sees this program as a milestone in its long-term innovation project aimed at creating a unified access point between the financial sector and the crypto market. Notably, this is not SWIFT’s first venture into the crypto space, as it also conducted international CBDC tests earlier this year.

Key Challenges Facing SWIFT

However, the ambitious project faces several challenges, such as regulatory inconsistencies, data privacy concerns, and the integration of different blockchains. According to SWIFT, the biggest obstacle is the existence of “digital islands”, or unconnected digital platforms.

To address these issues, SWIFT is focused on building the most comprehensive banking network, with plans to integrate emerging, bank-led networks into its digital asset initiative.

SWIFT’s Role in Bridging Web3 and Traditional Banking

Will Wendt, ecosystem lead at Oasis Protocol, commented: “I believe SWIFT’s initiative brings us closer to achieving the goals of Web3 encryption. While Web3 networks are transparent for payments, allowing anyone to view wallet addresses and transaction histories, this level of transparency may not align with the needs of traditional banks relying on SWIFT.”

A Potential Milestone for the Crypto Sector

One of the largest regulatory hurdles for the global banking system is the need for privacy. Customers' sensitive financial information must remain confidential, and Wendt claims that SWIFT’s background makes it an ideal solution to meet this demand.

“Creating a seamless user experience will be essential in addressing these challenges,” Wendt added.

SWIFT is planning to extend this pilot program to over 11,000 financial institutions next year. The network is confident in its ability to connect these banks with both existing and newly emerging digital assets and blockchains. If successful, this initiative could prove to be a significant milestone in the crypto sector.