International payments group Swift is creating its own blockchain in order to facilitate transactions between global banks, as it seeks to compete with the growing stablecoin industry.
Swift said on Monday that it would work with Bank of America, Citigroup and NatWest, among other banks, to create a shared digital ledger that would be used to facilitate transactions in tokenised products including stablecoins.
Swift said the move would improve cross-border transactions and that the blockchain would allow it to “record, sequence and validate transactions and enforce rules through smart contracts”.
The move comes amid growing competition between mainstream banks and payments groups and the cryptocurrency industry. The $300bn stablecoin industry, which is dominated by issuers Tether and Circle, poses a threat to payment groups such as Swift because it allows users to transfer funds directly without the need for intermediaries.
The US passed landmark legislation in July to regulate the stablecoin industry, a move that has encouraged banks such as JPMorgan Chase and Citi to explore launching their own versions of the tokens, which are pegged to the value of the dollar.
Last week, nine European banks including UniCredit, ING and Danske Bank said they would jointly launch a euro-denominated stablecoin by the second half of 2026, as they seek to compete with the mostly dollar-denominated stablecoin market and explore using the token for their transactions.
Headquartered in Belgium, Swift is a co-operative group that facilitates cross-border payments between more than 11,500 banks and financial services companies around the world. It said its blockchain would “make instant, always-on cross-border transactions possible at unprecedented scale”.
Swift will work with blockchain technology company Consensys to create a prototype of the ledger, which it will then test with the banks to decide which transactions — in which currencies and between which countries — it should offer first. Consensys is led by Joseph Lubin, an early pioneer in the crypto industry and a co-founder of ethereum.
Last week, Swift said it was working to improve its fees for payments through “full predictability on price and speed for retail transactions — with no hidden fees, full value transfers and instant settlement”, in another move to compete with stablecoin providers.
McKinsey said in a report this year that stablecoins represented “a direct challenge to traditional global payments rails” such as Swift, because legacy systems could take up to five days to complete a transaction, had multiple intermediaries and typically carried out “manual or only semi-automated” anti-money laundering and other regulatory customer checks.
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