London-based enterprise DLT and blockchain company SETL has delivered a pilot project for SWIFT which implemented a common framework linking tokenisation systems between central security depositories (CSDs) and global custodians.
SWIFT, Clearstream, Northern Trust and other market participants joined SETL to explore the issuance, delivery versus payment (DVP), and redemption processes to support a frictionless and seamless tokenised asset market.
The experiments, which used established forms of payment and central bank digital currencies (CBDCs), and its results will be revealed in a report that will be published ahead of SWIFTS annual SIBOS conference.
The market for tokenized assets is expected to reach 24 trillion USD by 2027, which led SWIFT to explore how it can support the growth and development of the tokenized asset market alongside market participants.
A world where tokenized and traditional assets co-exist will create a multiplicity of technologies, platforms, and regulatory environments. This is a key risk that SWIFT wants to address by ensuring interoperability, interconnecting market participants, and simplifying their operations by completing activities centrally that would otherwise be performed bilaterally between institutions.
For the pilot, SETL used its PORTL suite of products, which provides a permissioned toolset for financial institutions to build applications that interoperate between existing infrastructures and a range of enterprise ledger technologies including Corda, Besu, Fabric, DAML and SETL’s own high-performance ledger.
SETL-powered RLN “dwarfs all other alternatives in sheer speed and scalability”
Marjan Delatinne, Head of Payments, SETL said, “We are entering a pivotal moment of history by connecting the dots between SWIFT and the new tokenized world. This experiment could lay the foundation for universal interoperability between participants and systems during the transactional lifecycle of tokenized assets.”
Anthony Culligan, Chief Engineer at SETL stated, “We are very pleased to be contributing to this important initiative. We see significant innovation in securities tokenization at the moment and these experiments have the potential to create broader accessibility and interoperability between the emerging networks.”
Vikesh Patel, Head of Securities Strategy, SWIFT, said, “Our vision for instant and frictionless transactions not only applies to traditional securities instruments but also to new asset classes as well. The insights from this exercise with leading capital markets participants will help us define and prioritise the concrete steps required to enable seamless processes for tokenised assets.”
Philippe Morel, CEO of SETL, concluded: “At the beginning of the year we announced that the SETL-powered Regulated Liability Network (RLN) was proven to handle 1 million transactions per second, a result that dwarfs all other alternatives in sheer speed and scalability. We’re delighted to announce this important next step, cementing our position as a leader in the field of regulated tokens and bringing the reality of DLT adoption in financial markets, with all the benefits the technology promises, a little closer.”