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SWIFT to Experiment With Supporting Tokenized Asset Market in Q1 2022 - FX Leaders - FX Leaders

Leading provider of secure financial messaging services SWIFT has confirmed its interest in exploring the fast emerging tokenized asset space as soon as Q1 2022. The organization is planning to experiment how to play a larger role as a connector of tokenized assets worldwide.

SWIFT is partnering with Clearstream, Northern Trust, SETL and other players to look at how it can increase interoperability between participants and systems in the transaction of tokenized assets. Tokenization offers an opportunity to transform not only capital markets by being applied as a concept to securities, stocks and bonds, but also has other real world applications, including real estate and art.

Several banks and securities firms have already started developing tokenization services such as fractionalization to break down high value assets into digital tokens to reduce the costs of entering the space and offering opportunity for more investors to enter the space. Financial market infrastructures have also begun to leverage tokenization among the complete lifecycle of digital securities.

SWIFT can leverage its vast and established infrastructure to combat possible inefficiencies and fragmentation even as it reduces costs and risks of tokenization going forward. Although it would bring about a higher level of centralization, it can simplify tokenization opportunities significantly.

According to Chief Innovation Officer at SWIFT, Thomas Zschach, “As a neutral cooperative with a reach across 11,000 institutions in more than 200 countries, and oversight by central banks globally, SWIFT is uniquely placed to engage closely in the future of securities. We look forward to this set of new experiments and innovating collaboratively with market participants on the emerging trend of tokenised assets.”