MNI INTERVIEW: Swift Adapts To Digital, Currency-Diverse World

Global payment systems must evolve to deal with a greater diversity of currencies and the rise of digital assets, a senior executive at Swift told MNI, adding that his organisation does not see China’s CIPS network as a competitor and will continue working closely with it to improve yuan cross-border transactions.

“The future of payments is one where multiple networks, currencies, players and technologies must not only co-exist but also be interoperable,” said Kevin Wong, Swift’s Chief Executive for APAC, adding that the challenge for the most established bank payment network lies in “paving the way to seamless integration and interoperability.”

The yuan is now one of the most used major global payment currencies for cross-border payments on the Swift network, ranking between fourth and sixth according to monthly data, Wong said in an interview. But he stressed that Swift remains complementary to China’s Cross-Border Interbank Payment System, whose regulation was updated by the People’s Bank of China earlier this month to simplify access for overseas entities and support the cross-border use of the digital yuan. (See MNI: Beijing Pushes Yuan's Global Role As U.S Dollar Falters)

“We have been working closely with each other… most recently on the back of the Lujiazui Forum in Shanghai, we had a very productive meeting with the CEO of CIPS on how to further enhance the customer experience in RMB cross-border transactions,” Wong said, noting that while Swift is a messaging system, CIPS handles the clearing and settlement of funds.

“Swift is currency-agnostic, supporting over 150 currencies globally and allowing global transaction participants to decide which currency they prefer to transact and settle with,” he said.

DIGITAL ASSETS

Swift is adapting to the fast expansion of digital assets, Wong said, working with its community to incorporate digital token identifiers, blockchain wallet addresses and DLT-based settlement locations into transactions and updating ISO messaging standards.

“Our live trials with banks across Asia, EU and North America demonstrate how financial institutions can seamlessly make and track transactions for all existing and emerging assets and currency formats, using the same Swift infrastructure that they use today,” he said. (See MNI: China To Test Offshore Stablecoin As U.S. Coins Spread)

“Swift was built to connect the global financial ecosystem in a systematic, safe and secure way, underpinning the integrity of the system. This is extremely valuable and often taken for granted. This is why we strongly believe we are best placed to connect the existing and new platforms that are adopted.”