SWIFT Will Explore Tokenized Asset Market in 2022

SWIFT will conduct "a series of experiments" around the issuance and redemption of tokenized assets.

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Key Takeaways

  • Financial messaging giant SWIFT has announced plans to facilitate the burgeoning tokenized asset market.
  • It will conduct experiments in Quarter 1 of 2022 to assess its role as a connector of tokenized assets.
  • Estimates by the World Economic Forum project a tokenized asset market capitalization of $24 trillion by 2027.

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The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, has announced plans to support the rapidly-growing tokenized asset market. 

New Year’s Plans

SWIFT, a leading provider of secure financial messaging services, has published plans to support tokenized asset markets globally by the first quarter of 2022.

To that end, SWIFT has announced that it will conduct “a series of experiments in Q1 2022 leveraging its trusted role as a central platform” to explore its possible utility within the burgeoning industry.  Specifically, SWIFT says it is exploring ways in which it can “enable and improve interoperability between participants and systems during the transactional lifecycle of tokenised assets.”

SWIFT’s focus will be to help “all entities” interconnect efficiently, supporting the smooth flow of tokenized assets by linking tokenization platforms. It will only deal with regulated assets, and it will not custody cryptocurrency nor act as a direct settler of tokenized assets. 

Working with other major institutions in the industry, SWIFT says it will “explore the issuance, delivery versus payment (DVP), and redemption processes, to support a frictionless and seamless tokenised asset market.” 

The experiments that SWIFT has planned for next quarter will build on its past work. In May, SWIFT published work done with the consulting firm Accenture in which it examined what role it could play in supporting the adoption of CBDCs.

Chief Innovation Officer at SWIFT, Thomas Zschach, spoke of the natural fit for SWIFT to support tokenized assets globally: 

“As a neutral cooperative with a reach across 11,000 institutions in more than 200 countries, and oversight by central banks globally, SWIFT is uniquely placed to engage closely in the future of securities.” 

SWIFT’s announcement does little to elucidate the nature of these “experiments;” however, it is at least apparent from today’s announcement that whatever the nature of its role turns out to be, SWIFT intends to be a central player in the emerging tokenized assets industry.

Disclosure: At the time of writing, the author of this piece owned BTC and several other cryptocurrencies. 

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