A global platform that connects the vast majority of the world’s banks has begun building a blockchain application to simplify cross-border payments.
Announced today, The Society for Worldwide Interbank Financial Telecommunication (Swift) is integrating open-source blockchain technology with its own products to build a proof-of-concept that might one day replace the so-called “nostro” accounts its members keep filled with cash all over the world – just in case they need it.
If successful, the blockchain application has the potential to finally achieve a longstanding dream of Swift, to free up that cash so it can be invested in more profitable measures.
Speaking with CoinDesk, the company’s head of banking markets, Wim Raymaekers, explained what a successful test of distributed ledger technology (DLT) might mean to his clients.
“We’re going to use DLT as a proof-of-concept to synchronize those databases in real-time, so that banks can optimize their liquidity globally.”
Currently, Swift’s network of 11,000 financial institutions monitor their accounts around the world using the platform’s existing debit and credit updates via end-of-day statements.
The maintenance of these accounts accounts for a “significant portion of the cost of making cross-border payments,” according to a