Yesterday, Jonathan Ehrenfeld Solé, Chief Strategy Officer at SWIFT, explained how SWIFT could leverage its connectivity with 11,000 banks to enable them to issue, clear, trade and settle digital assets on both public and private blockchains. SWIFT is best known for its cross-border payment messaging network.

Before going into details, the press misquoted Ehrenfeld Solé for making optimistic statements about cryptocurrencies. What he actually said was: “There is undeniable interest from institutional investors in digital assets. Be it stablecoins, CBDCs, or anything you can tokenize in the capital market space. So it could be stocks, bonds, or anything else.”

Later, he was even more specific. “For the capital markets industry, it’s not necessarily crypto where we see heavy consumption now or in the long term,” Ehrenfeld Solé said. “It is more about digital securities or the tokenization of stocks or bonds. And anything related to the cash part of that, which could be CBDCs, stablecoins, or something in that realm. But not necessarily crypto for now.”

SWIFT as a blockchain interoperability provider

He does, however, support public blockchain and was speaking at a Chainlink event about working on an interoperability proof of concept with Chainlink Labs. Chainlink is a decentralized network of oracles that help feed data like stock prices or weather sensors to its use in smart contracts. It also has a Cross-Chain Interoperability Protocol (CCIP) which aims to provide a messaging interface so that smart contracts can communicate with each other across different blockchains, both public and private.

Ehrenfeld Solé spoke about headlines and digital assets. “Institutional investors want to have access to these assets at the same time they have access to traditional assets,” he said. “And that means an asset manager wants to use the same custodian that they use today. And those custodians probably want to use the same sub-custodians to establish themselves on the same infrastructures that they have today. And that, in theory, means they want to use a network that can connect to all of these capabilities.”

He added: “And that’s where SWIFT comes into play. You have institutions that say ‘hey SWIFT, we want you to be the network to connect to that’”.

But SWIFT doesn’t want to be in the business of picking winners on the blockchain. You don’t want to invest in integrating with a blockchain that falls out of favor next year. Therefore, it is interested in Chainlink’c CCIP, which has been integrated with 15 blockchains so far.

Sergey Nazarov, Co-Founder and CEO of Chainlink Labs, highlighted that SWIFT has one of the most important public key infrastructures in addition to its messaging, routing and standards network.

“Just like we don’t want to build public key infrastructure for 11,000 banks around the world because that’s already been done, SWIFT doesn’t necessarily want to build integration with every chain on the planet because that’s a body of work we’re focused on,” Nazarov said.

Ehrenfeld Solé noted that SWIFT’s messaging standard has already been updated to support asset tokenization. It has been adapted to support sharding, different asset identifiers, and the use of wallets instead of accounts.

Chainlink and SWIFT have been quietly collaborating for years. Chainlink won a SWIFT startup competition in 2016 and worked with the network on early bond issuance and settlement tests years ago.

More recently, meanwhile, SWIFT has been experimenting with blockchain for corporate actions like bond payments and a separate test for tokenized cross-border payments.