SWIFT, the global system for handling cross-border payments, announced today that it will integrate R3’s open source blockchain solution into a proof of concept phase.
Proof of Concept Blockchain integration
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a global banking payment network. It works with more than 11,000 institutions and is estimated to attract over $ 200 billion a day. Gottfried Leibbrandt, CEO of the company, today announced at the Fintech Forum in Paris that they are working on a proof of concept for integrating R3’s blockchain-based Trade Finance platform into the SWIFT Global Payments Innovation (GPI) framework.
“We’ll announce today a proof of concept with the R3 Blockchain for trading, where you can initiate a payment on the trading platform and then go into the GPI. We explore networking with many things, and banks have always been part of this interconnections,” says Gottfried Leibbrandt.
Launched in 2017 by SWIFT, the GPI initiative aims to reduce turnaround time, reduce costs and increase transparency. However, it relies predominantly on the existing infrastructure and is therefore rather slow and expensive.
Leibbrandt criticized the payment network SWIFT because of their high published error rate:
The published error rate of SWIFT is six percent. Imagine, six percent of your emails would not have passed without additional human intervention.
Garlinghouse also did not miss the opportunity to highlight the benefits of decentralization while highlighting some weaknesses of SWIFT:
Swift is today a one-way messaging framework, it is not a liquidity provider. When we think of an Internet of value, it’s a mix of two-way messaging frameworks – the move to a real-time chat protocol …
Leibbrandt, on the other hand, said that his company’s reluctance to blockchain was further compounded by volatile volatility and sharp declines in cryptocurrency prices. While none of them pointed to a possible short-term partnership, Garlinghouse said they are open to “ways we can work with SWIFT”.
However, it is worth noting that last year R3 launched an application to enhance global cryptocurrency payments, Corda Settler, the first settlement mechanism using the native cryptocurrency XRP. While R3 and Ripple are technically competing, the price of XRP has risen by nearly ten percent since the announcement of SWIFT.
Also published on Medium.