SWIFT Integration Places Chainlink at the Heart of a New Financial Order

Chainlink's recent SWIFT integration cements its position at the center of of an emerging financial infrastructure | Credit: Anete Lusina / Pexels.

Key Takeaways

As financial institutions embrace tokenization, they increasingly rely on Chainlink’s infrastructure. Chainlink’s latest integration lets banks manage tokenized assets using SWIFT messaging standards. Other global infrastructure players that have partnered with Chainlink include Intercontinental Exchange, Euroclear, and DTCC.

In 2017, Steve Ellis, Ari Juels, and Sergey Nazarov described their proposal for a decentralized oracle network that would let blockchains communicate with external systems.

Eight years later, Chainlink is deeply embedded in an emerging blockchain infrastructure that is reshaping global finance.

As financial institutions around the world build out their various blockchain platforms, Chainlink’s latest play plugs tokenized assets into the SWIFT network.

Moving Value Between Networks

Building on an earlier experiment involving the Depositary Trust and Clearing Company (DTCC), Chainlink’s SWIFT integration establishes a standardized framework for moving digital assets between institutions.

Starting with the subscription and redemption of tokenized funds, the integration means banks are able to manage on-chain assets using ISO 20022—the universal standard for interbank messaging.

The initial pilot focused on UBS Tokenize. But due to Chainlink’s platform-agnostic design, the integration could be extended to HSBC’s Orion, JPMorgan’s Kynexis, or one of the other tokenization systems being piloted by banks around the world.

Just as SWIFT provides the messaging standard that lets banks know to draw euros and debit dollars (for example), Chainlink’s cross-chain interoperability protocol (CCIP) lets different blockchains communicate. And as SWIFT explores its own blockchain options, these tend to retain its position as a neutral financial infrastructure.

Regardless of the source and destination chains (and there are lots, as each tokenization engine can itself be multi-chain), the SWIFT integration translates ISO 20022 messages into blockchain-native calls that trigger the necessary actions.

Interoperability for Digital Money

The flipside to the tokenization of investment assets is the rise of digital money, where Chainlink is also emerging as the default interoperability layer.

For example, Circle’s Cross-Chain Transfer Protocol (CCTP) integrates CCIP messaging.

Meanwhile, although they operate their own, centralized mint-and-burn mechanism, Tether, Paxos, and Ripple, still rely on Chainlink’s oracle network for price feeds that help stablecoins maintain their peg.

Beyond stablecoins, Chainlink has also participated in central bank digital currency (CBDC) pilots around the world. These include Singapore’s Project Guardian, which paved the way for the recent SWIFT integration; a Hong Kong initiative that used CCIP to swap eHKD for stablecoins; and Brazil’s digital real pilot.

Story Continues

Bringing Market Data on-Chain

Even in the U.S., where the government has turned its back on CBDCs, Chainlink has ties to federal agencies, including the Securities and Exchange Commission (SEC) and the Department of Commerce.

The collaboration with the Commerce Department harks back to Chainlink’s original premise—bringing real-world data on-chain.

Chainlink oracles now provide this service for GDP, inflation, and domestic sales data. Meanwhile, a partnership with New York Stock Exchange-owner Intercontinental Exchange (ICE) does the same for foreign exchange rates and precious metal prices.

Moreover, the most ambitious application of Chainlink’s oracle network may still be to come.

Toward More Automated Finance

In 2024, research conducted by Chainlink, SWIFT, and Euroclear, as well as major banks and asset managers, suggested that reams of company data could be deployed on-chain next.

The report highlights a lack of standardization in corporate reporting, where announcements on mergers, dividends, and stock splits are distributed via a patchwork of different channels, with no consistency in structure, format, or terminology.

To address this, the report proposes using AI models and Chainlink oracles to autonomously extract unstructured data, reformat it to be machine-readable, and publish it on-chain.

Echoing SWIFT’s efforts to harmonize financial messaging in the 1970s, it calls for open data standards to be deployed at the oracle layer, creating a “unified golden record,” or shared source of truth.

The combination of cross-chain interoperability and trusted data streams, overlaid onto SWIFTs messaging network, could be transformational for tokenized finance.

Picture smart contracts that trigger buy and sell orders based on real-time price feeds, fund portfolios that automatically rebalance, and novel digital investment products that respond to movements in the crypto market and real-world signals.

All these become possible in a new financial system.

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