Swift lines up 17 banks for tokenized deposit pilot

Swift is preparing a pilot that could let major banks move tokenized deposits around the clock, a practical step toward faster cross-border payments for the banks that power everyday transfers. For investors watching crypto infrastructure meet traditional finance, the key detail is the split: the tokens can move at night and on weekends, but the final fiat settlement still runs through older systems during business hours.

The member-owned banking cooperative said Thursday that 17 banks across six continents are set to participate in a pilot of its blockchain-based ledger, according to Swift’s announcement. The project focuses on tokenized deposits, which are digital tokens that represent money held at a bank.

Swift sits at the center of global banking communications, connecting thousands of financial institutions. Its move matters because it shows large banks using blockchain technology inside the existing financial system, rather than replacing that system outright.

Several participating banks are designated by the Financial Stability Board as Global Systemically Important Banks, including BNP Paribas, BNY, Citi, HSBC, Standard Chartered, UBS and Wells Fargo. That label is used for banks whose failure could pose risks to the wider financial system.

What the ledger changes

Swift said its ledger lets banks transfer tokenized deposits “overnight and on weekends.” In plain English, that means the digital record of a bank deposit can move outside the normal timetable of traditional payment systems.

That is different from final settlement, the point when actual money movement is completed and obligations are discharged. Swift said ultimate fiat settlement still depends on legacy systems that operate during business hours. Fiat means government-issued currency, such as dollars or euros.

Swift said banks can improve the client experience and make global liquidity more efficient while keeping compliance, credit, risk and control standards from existing payment processing. Liquidity refers to how readily money is available where and when it is needed.

Mahesh Kini, global head of cash management at Standard Chartered, said Swift’s new ledger combines tokenized deposits with its global network to deliver “instant, always-on money movement.”

A blockchain built for banks

Swift said in a March blog post that the ledger uses architecture compatible with the Ethereum Virtual Machine, or EVM. The EVM is the software environment used by Ethereum-compatible networks to run blockchain applications.

Even with that Ethereum-compatible design, Swift’s system is not a public crypto network. The ledger operates as a shared transaction environment, while banks keep authority over their own assets. That makes it a more centralized setup than open blockchains where independent validators typically process activity.

The approach fits a broader pattern in finance. Traditional institutions have spent years testing blockchains for payments, settlement and tokenization, the process of representing real-world assets or claims as digital tokens.

Other networks have tried to address the same pain point. XRP Ledger was designed as a cheaper and faster alternative to Swift’s technology stack, with a focus on settlement speed. Canton Network has also gained attention from financial institutions by combining compliance features with privacy controls.

JPMorgan has been working with blockchain systems for years and renamed its blockchain and tokenization unit Kinexys in 2024, changing it from Onyx. Swift said its own product was built in nine months.

For now, Swift’s pilot is less a full break from old banking rails than a test of how much speed banks can add on top of them. The ledger may extend when tokenized deposit transfers can occur, while the final movement of traditional money remains tied to the banking infrastructure already in place.

This story draws on original reporting from Decrypt.