According to Debo Sen, head of digital assets at Citi, blockchain technology may change the infrastructure beneath cross-border payments. Swift’s massive network could make it one of the best-positioned organizations to connect the new systems.
“If anybody can pull it off, it’s Swift because of the network effect it has,” Sen said. “Swift is well-positioned. They have 11,500 banks connected to them. They understand how the banks work. The banks are familiar and comfortable.”
The firm’s messaging system — a service estimated to have facilitated the movement of quadrillions of dollars since its inception in 1973 — does not itself hold or transfer customer funds. It sends the standardized instructions that allow banks to debit and credit accounts, often through chains of correspondent banks. It facilitated the transfer of an estimated $5 trillion daily, roughly $1.2 quadrillion to $1.5 quadrillion annually, of the total global payments market that McKinsey estimated at around $2 quadrillion.
While those processes can take one to five business days, depending on the banks, currencies and compliance checks involved, the actual payment instruction can reach a destination bank quickly. Jack Pouderoyen, head of digital asset strategy at Swift, said 75% do so within 10 minutes — even though the underlying transfer of funds can take longer depending on the banks, currencies and settlement systems involved.
