SWIFT Accelerates Blockchain Utilization, Three Singapore Banks Successfully Conduct Interbank Tokenized Deposit Transactions

Key Points of This Article

• Utilization of SWIFT's blockchain ledger
• Involvement of HSBC, Citibank, Standard Chartered, and others

New Interbank Transactions on SWIFT's Ledger

On the 10th, Singapore's three major banks, DBS, OCBC, and UOB, announced that they successfully conducted actual interbank transactions denominated in Singapore dollars using tokenized deposits on a blockchain-based ledger constructed by the Society for Worldwide Interbank Financial Telecommunication (SWIFT).

This is the first time the three banks have jointly utilized this system, marking a significant milestone for Singapore's banking industry. However, it is still in the early stages, and details regarding transaction amounts, number of transactions, participating customers, and specific timelines for broader commercialization have not been disclosed.

In this transaction, the remittance messages from each bank were coordinated through SWIFT's ledger, and the resulting receivables and payables were recorded on each bank's own tokenized deposit infrastructure. After matching on the ledger, the final settlement was conducted through existing systems.

SWIFT's ledger interconnects the ecosystem of bank tokenized deposits, effectively eliminating significant hurdles in the introduction of digital money. In the future, there is potential for new services to be created in the fields of corporate finance, trade, and digital commerce.

Rachel Chew, Chief Operating Officer (COO) and Co-Head of Digital Assets at DBS's Global Transaction Services division, commented:
In the digital economy, our banking customers' businesses operate 24/7, and the movement of funds should reflect that. This trial operation has demonstrated that by utilizing tokenized deposits, customers can make payments in USD or SGD at any time, including weekends.

Preceding Actual Transaction Cases

In July, SWIFT announced that the blockchain-based shared ledger had reached a state of initial usability. Seventeen banks across six continents are preparing to trial actual transactions using tokenized deposits, including ANZ, Citibank, HSBC, DBS, OCBC, UOB, UBS, and Mitsubishi UFJ Financial Group. Since then, there have been increasing instances of trial operations like this one.

This ledger functions as a "coordination layer" connecting each bank's unique tokenized deposit systems, allowing participating banks to move funds even outside regular business hours and on weekends.

In August, HSBC and Standard Chartered first realized the transfer of tokenized deposits between banks using this system. Furthermore, on September 2, Citibank conducted actual transactions denominated in USD with First Abu Dhabi Bank in the Middle East and OCBC in Southeast Asia, marking the first transaction conducted by a U.S. bank on this ledger.

Additionally, on September 5, Citibank and DBS executed a weekend USD cross-border payment between Singapore and New York, completing a process that typically takes several days in just a few minutes. DBS commented that this represents a significant advancement compared to the industry standard, which typically takes up to two business days for international payments.