Taurus outlines three technical hurdles for banks adopting Swift’s blockchain network

Swift’s new blockchain-based ledger may be ready for live payments, but banks still need their own digital-asset infrastructure before they can connect to it, according to Lamine Brahimi, co-founder and managing partner of custody and tokenization firm Taurus.

“If you want to connect today to the Swift ledger, you need three things,” Brahimi said in an interview with CoinDesk. “You need your own permissioned ledger that interacts with that of Swift, you need wallet capabilities, and you also need tokenization and smart-contract capabilities to be able to integrate the Swift smart contracts.”

This criteria means Swift’s ledger is a replacement for a bank’s internal systems. It is an orchestration layer designed to enable institutions to move tokenized deposits across borders around the clock, while final settlement continues through existing arrangements. The banks still need systems to hold and manage tokenized deposits, digital asset wallets and smart contracts used in the process.

Swift said in July that 17 banks were preparing live tokenized-deposit transactions, signalling its first move to modernize its bank messaging system which has dominated the traditional financial sector since the 1970s. It presently still dominates money movements of up to $1.5 quadrillion a year.