TL;DR
- Growth Projections: The digital asset market could reach $30 trillion by 2034, with 91% of institutional investors interested in tokenized assets.
- Fragmentation Challenges: The proliferation of platforms and regulations creates “digital islands” that complicate the global integration of digital assets and digital currencies.
- Swift Innovations: Swift is moving towards global digital asset interoperability, with successful experiments in tokenized value transfer and CBDC integration.
In recent years, the growing acceptance and potential of digital assets has captured the attention of the global financial sector.
Swift, the leading provider of infrastructure for international payments, is leading efforts to facilitate the movement of these assets globally.
The organization has announced that it is moving forward with implementing solutions that will allow its members to transact with regulated digital assets and currencies through its network, based on innovative experiments and community collaborations.
Projections for the digital asset market are optimistic.
According to recent estimates, the tokenized asset market could reach up to $30 trillion by 2034.
Furthermore, 91% of institutional investors have expressed interest in investing in these assets, underlining a growing recognition of their potential value.
However, despite this enthusiasm, global adoption faces significant challenges due to the fragmentation of the platform ecosystem and regulations.
The proliferation of tokenization platforms and different regulatory environments has given rise to what are known as “digital islands”, creating additional costs and risks for market participants.
Institutional investors, in particular, find it difficult to scale their businesses in digital assets due to the complexity of interacting with multiple platforms.
On the other hand, although more than 130 countries and monetary unions are exploring central bank digital currencies (CBDC), there is still much to be done to integrate these emerging currencies into the global economy.
Swift Advances and Future
Swift has proven to be a key player in global interoperability over its 50 years of existence, and is applying this expertise to the integration of digital assets and currencies.
The organization has conducted successful experiments showing how its infrastructure can facilitate the transfer of tokenized value between public and private blockchains.
Swift’s CBDC sandbox projects, conducted with central and commercial banks in Europe, Asia, and North America, have shown the ability to interconnect different CBDC networks and assets.
Looking ahead, Swift plans to test interoperability between multiple ledgers for Delivery-versus-Payment (DvP) and Payment-versus-Payment (PvP) transactions.
These tests have the potential to allow securities buyers to pay for and exchange tokenized assets in real-time via the Swift network.
While executing these transactions with tokenized money presents challenges, such as integrating payment with tokenized assets, Swift is working on connecting these elements initially with fiat currencies and eventually with CBDCs, tokenized money from commercial banks, or regulated stablecoins.
Swift’s work is a crucial step towards the full integration of digital assets into the global financial system.
The organization continues to collaborate with the financial community to develop technical solutions that will enable effective interoperability and seamless integration of digital assets and currencies in the near future.
