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SWIFT Says Blockchain Tech Needs To Progress Further Before Using In Mainstream

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The Society for Worldwide Interbank Financial Telecommunication or SWIFT said it has completed blockchain proof of concept or PoC test, which showed that distributed ledger technology or DLT, or the blockchain technology, requires further progress before using in the mainstream. The blockchain PoC was to address Nostro account reconciliation issues between the accounts of 34 banks.

Blockchain or distributed ledger technology is a decentralized and encrypted ledger, which is the base for bitcoin and other cryptocurrencies.

The provider of secure financial messaging service, which is owned by about 11,000 banks, noted that the initiative was one of the most extensive blockchain proofs of concept powered by Hyperledger Fabric 1.0 executed in the industry so far.

Based on the the participating banks' requirements, SWIFT developed a DLT solution through which Nostro Account owners and their servicers could share a private confidential ledger recording transactions related to their Nostro accounts.

In its statement, SWIFT noted that the PoC sought to assess whether DLT, combined with SWIFT assets, would meet industry-level governance, security and data privacy requirements. It also checked whether DLT could bring concrete benefits over other architectures, and DLT's current level of maturity to serve as a production-grade application within a mission-critical global infrastructure.

According to the Brussels-based messaging system, the PoC showed that DLT could deliver the business functionalities and data richness required to support automated real-time liquidity monitoring and reconciliation.

Damien Vanderveken, Head of Research and Development at SWIFT, noted that the PoC went extremely well, proving the fantastic progress that has been made with DLT and the Hyperledger fabric in particular.

At the same time, the PoC showed that further progress is needed on the DLT technology itself before it will be ready to support production-grade applications in large-scale, mission-critical global infrastructures, it said.

SWIFT that handles more than half of all high-value cross-border payments said it is a strategic priority for them to work with new technologies like DLT and incorporate them into key solutions like gpi.

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