Swift says that is has signed an additional 22 banks to its blockchain proof of concept (PoC).
The project is designed to determine if blockchain technology can help banks reconcile their international nostro accounts in real time and is part of Swift’s Global Payments Innovation (GPI).
The new banks are: ABN Amro, ABSA, BBVA, China Construction Bank, China Minsheng Banking, Commerzbank, Deutsche Bank, Erste Group, FirstRand Bank, Intesa Sanpaolo, JP Morgan, Lloyds Bank, Mashreq, Nedbank, Rabobank, Santander, Société Générale, Standard Bank, Standard Chartered, SMBC, UniCredit and Westpac. They join the six founding banks, who are ANZ, BNP Paribas, BNY Mellon, DBS, RBC and Wells Fargo.
The PoC was announced in April, when the founder banks started working with Swift to identify the challenges and specifications, and to build the application. The 22 banks will work independently to the founder banks, in further testing and validation.
“Collaboration is the cornerstone of innovation,” says Wim Raymaekers, head of banking markets and GPI at Swift. “This new group of banks allows us to greatly extend the scope of multilateral testing of the blockchain application and thus add considerable weight to the findings. We warmly welcome the new banks and look forward to their insights.”
As previously reported, the PoC application will use a private permissions based blockchain in a closed user group environment. It will leverage the technology of Hyperledger Fabric v1, a platform that was released earlier this year.
The overall aim of the GFI is to make cross-border payments more efficient and Swift views blockchain as a potentially key part of this. Nostro accounts are those that banks hold in foreign currency in another bank. By making it easier and faster to transfer money in and out of these accounts, international banks will be able to improve their liquidity.
At the moment it is difficult to monitor real time nostro positions, due to a lack of intraday reporting coverage. This solution would help remedy this.
While some speculate that the advent of blockchain technology in trade finance would spell the end for Swift, the messaging system which has supported trade transactions for decades, the organisation has been proactive in its approach, looking for ways in which blockchain can keep it relevant.