On the latest episode of “The Future Is On” podcast produced by Global Custodian and Chainlink, Swift head of strategy Jonathan Ehrenfeld and Chainlink co-founder Sergey Nazarov highlighted their organizations’ long-term collaboration to connect traditional financial institutions to blockchains ahead of this year’s Sibos.
In 2023, Swift completed a proof of concept demonstrating how global financial institutions can transact with multiple blockchains using Swift’s private key infrastructure and Chainlink’s Cross-Chain Interoperability Protocol (CCIP).
Ehrenfeld and Nazarov agreed that Swift’s private key infrastructure and the ISO 20022 standard used by more than 11,000 financial institutions in 200 countries and territories around the world are essential for bringing banks onchain.
“The only extension you need from a blockchain point of view is the ability for that securely signed transaction in the ISO standard to be about blockchain events,” Nazarov explained. “That’s what Chainlink does in this collaboration.”
Bringing institutions onchain via Swift and Chainlink makes sense, Ehrenfeld said, because the two organizations are philosophically very similar, emphasizing efficiency, decentralization, and global standards.
“Swift will almost always have a role to play in defining what a transaction is because it is the language of the capital markets,” Nazarov agreed. He said Chainlink translates Swift’s universal language into blockchain standards – a function that gains significance as a larger percentage of transactions involve tokenized real-world assets.
“If you can do [transactions] using the Swift standards you already have, that’s the best of all worlds for all participants because they can do what they’ve already been doing, which gets them onboarded and into the blockchain ecosystem,” he explained.
Last November, Swift, Chainlink, and UBS Asset Management announced the success of an innovative pilot for settling tokenized fund subscriptions and redemptions using the Swift network as part of the Monetary Authority of Singapore’s Project Guardian.
Using the Chainlink Runtime Environment (CRE) – a modular, chain-agnostic computing environment that makes it faster and easier to build DeFi applications compatible with existing financial systems – substantially accelerated the process.
“It was not about flashy headlines,” Ehrenfeld said. “It was about building something that could be put into production quite fast with realistic use cases.”
Looking ahead toward Sibos, the premier annual global financial services event organized by Swift, Ehrenfeld expects digital assets, stablecoins, and interoperability will be front and center.
Nazarov said a shift toward clearly regulating digital assets in the U.S. will expedite their global influence. He believes a “perfect storm” for digital asset adoption in 2025 will lead to mainstream production in 2026 and beyond.
“Our goal is, as that regulatory clarity appears, as that market incentive to do transactions appears, that the cost and complexity of doing a transaction is not a problem.”