SWIFT has decided to develop a proof-of-concept gateway called GPI Link in partnership with R3. This shows clearly and strongly that blockchain is here to stay.
Blockchain is one of those disruptive technologies which is threatening the business of several Fortune 500 companies. Two major ones among them are credit card payment processor MasterCard and cross-border remittance facilitator SWIFT. The ability of blockchain-based payment networks to process international transactions in a much faster and cost-effective manner is what’s attracting more and more financial institutions towards payment rails like Ripple. And both these companies – including SWIFT and MasterCard – are watching this.
It’s becoming increasingly clear with every passing day that don’t adopt this revolutionary technology will be left behind, and those who accept it will stand to make a fortune much larger than they did with technologies existing till date. MasterCard already realized this long time ago and started accumulating a large number of blockchain patents despite its resistance towards cryptocurrencies, but SWIFT was not so swift in walking on the right path.Finally, however, it has also decided to do the right thing.
That’s right. SWIFT has announced its own blockchain-based proof-of-concept (PoC) gateway called GPI Link in partnership with R3, the company behind Corda blockchain network. Now, since the relationship of SWIFT and blockchain technology has been a rocky one since ever, everyone is not all-praises about SWIFT’s decision to adopt blockchain. While many have welcomed the company in crypto space, some have argued that a blockhain network developed by SWIFT won’t be as decentralized as it should be.
The relationship of SWIFT and Blockchain
As I said above, this has been a rocky relationship. SWIFT first announced its intentions to use blockchain technology back in 2015. The announcement was done by Wim Raymaekers , Head of Banking and Treasury at SWIFT. Then in 2016 SWIFT published a joint report developed in partnership with Accenture. The report acknowledged some advantages of blockchain, but at the same time also said that the technology was not mature enough to be used at industrial scale. The concerns highlighted specifically in the report included lack of regulatory frameworks, standardization, scalability and cyber security.
Nevertheless, in April 2017 it was announced by SWIFT that it’s going to use the Hyperledger Fabric of Linux Foundation to update its practices of cross-border market payments. So this proof-of-concept is certainly not the first thing being done by SWIFT on the blockchain front.
SWIFT, in case you don’t know, is a 46 years old organization based in Belgium. It’s a cooperative owned by about 11,000 member banks spread in 200 countries, and every day it handles as much as $5 trillion in cross-border transactions. This also includes more than half of all high-value cross-border transactions. Now you can imagine how important is SWIFT is in the banking industry. Therefore, its decision to adopt blockchain technology is yet another sign that cryptocurrencies and blockchain both are here to stay!