Author: Bootly; Source: Bitpush
According to an exclusive disclosure by foreign media outlet The Big Whale, international financial communications giant SWIFT is collaborating with several large international banks (including BNP Paribas and BNY Mellon) to select Ethereum's Layer 2 network, Linea, as a blockchain testing platform in an attempt to "move" its traditional cross-border payment messaging system onto the blockchain. It is reported that the project is promoted by Consensys, a core developer of Ethereum, and has attracted the participation of more than ten global financial institutions. It will enter the actual deployment stage in the next few months. An insider from a participating bank stated, "This collaboration is expected to bring about a major technological transformation for the global interbank payment system."
If this collaboration is officially announced in the future, it will not only be a technological milestone, but may also mark a historic turning point: the widespread adoption of blockchain and stablecoins is shaking the technological foundations of established financial infrastructure such as SWIFT, forcing them to take the first step in transformation.
Who is SWIFT? How important is its position?
Founded in 1973 and headquartered in Belgium, SWIFT (Society for Worldwide Interbank Financial Telecommunication) is the "super hub" used by banks around the world to transmit financial messages (such as payment instructions, clearing confirmations, and funds settlements). Simply put, SWIFT is like a "super WeChat group" covering banks worldwide. It doesn't handle specific services like deposits and remittances; it simply transmits instructions between banks regarding how much money A should transfer to B. Currently, SWIFT connects over 11,000 financial institutions worldwide, covering over 200 countries and regions, and processes over 42 million financial messages daily. It serves as the "nerve center" for global trade, cross-border remittances, securities trading, and clearing.
However, this highly centralized network system also faces many pain points:
Low efficiency: The cross-border payment cycle can take 1 to 3 working days, depending on the number of intermediary banks and national regulations;
High fees: Every transaction involves charges from intermediary banks;
Poor transparency: The payment path and status are unclear and difficult to track;
Geopolitical risks: In recent years, SWIFT has been used many times as a financial sanctions tool (such as Russia being removed from SWIFT), exposing its highly centralized strategic sensitivity.
Against this backdrop, blockchain technology, with its inherent decentralization, transparency, and high efficiency, is seen as a potential solution to SWIFT's "outdated structure."
Why Linea?
Linea is an Ethereum Layer2 network developed by Consensys, using ZK-Rollup (zero-knowledge rollup) technology, with the following significant advantages:
Privacy protection: ZK technology allows verification of transaction authenticity without exposing the data itself, meeting the bank's dual needs for compliance and confidentiality;
High performance and low cost: Compared with the Ethereum main chain, Layer2 can handle larger transaction volumes and lower fees;
Compatible with the Ethereum mainnet: Seamlessly connect with existing stablecoins, RWA, and DeFi components;
Enterprise-level support: Backed by Consensys, it has the ability and reputation to serve large institutions. Compared to other chains, Linea offers a "regulatory-friendly, high-performance on-chain environment," making it an ideal choice for SWIFT under current compliance pressures. Market data shows that after the news leaked, the price of the Linea token rose by over 14% that day and remains firmly above the rising range, significantly outperforming the broader market. What does SWIFT on the chain mean? If SWIFT migrates part or all of its messaging system to a blockchain, the following impacts will occur: 1. Reduced cross-border payment costs and time On-chain systems running on L2 architectures like ZK-Rollup can achieve transaction confirmation within seconds, significantly reducing intermediary links and corresponding fees. This represents a significant improvement over the current SWIFT payment system, which often takes three days to process. 2. Improved financial transparency and traceability On-chain records can be queried and audited by authorized parties, significantly enhancing anti-money laundering and regulatory compliance capabilities. At the same time, real-time visibility of transaction status enhances the transparency and trust of financial transactions. 3. Enable More Flexible Asset Settlement In the future, SWIFT will be able to transmit not only payment instructions but also the assets themselves. On-chain, assets such as stablecoins, government bonds, and bills can be implemented as smart contracts, thus achieving settlement finality. 4. Build a Global Unified Payment Standard Blockchain is inherently universal, unlike the fragmented standards of traditional finance. If SWIFT builds a unified standard based on this, it is expected to lead the next generation of global payment infrastructure. Who will benefit first? Who might be left out?
Potential winners:
Ethereum ecosystem: Linea's access to SWIFT will bring huge capital flows and application scenarios to the Ethereum mainnet;
Stablecoin issuers (such as USDC, DAI): will play a key role in on-chain settlement;
On-chain compliance service providers (such as Chainalysis, Fireblocks): benefit from the demand for regulatory-friendly infrastructure;
Modular DeFi component developers: provide underlying functions such as account systems, AML tools, and payment interfaces. Potential Victims of Pressure: Correspondent Banks: They profit from providing "transfer channels" within the SWIFT system. If these channels are replaced by on-chain smart contracts, their business models will be challenged. Established clearing houses and payment networks: If they fail to quickly transition to blockchain, they may be marginalized. Technologically backward national payment systems: Gradually losing competitiveness in the face of global on-chain payment systems. Summary: This is not SWIFT's first attempt to embrace blockchain. It has previously partnered with Chainlink to explore cross-chain communication and with Euroclear to test digital bond clearing. However, this move to migrate its core messaging system to the public blockchain represented by Linea is its most decentralized attempt yet. Whether SWIFT will actually be on the blockchain in the future remains to be officially announced. But even if it's just a testing phase, it's enough to send a strong signal: the "old order" of the global cross-border payments system is undergoing a technologically driven revolution.
Anais
Weatherly