In major institutional shift and a huge victory for crypto adoption, the world’s most-used cross-border payments system, SWIFT, has just chosen an Ethereum layer 2 blockchain for its upcoming cross-border payments pilot. The decades-old (i.e antiquated) system is going onchain – and the implications are massive.
“This move marks the biggest adoption of Ethereum Layer-2 by traditional financial institutions to date,” reported Binance Square, a news platform of the world’s largest cryptocurrency exchange, Binance. “With 30+ major banks participating, this pilot could reshape how international payments are processed, making transactions faster and cheaper.”
The selected Layer 2 blockchain is Linea, a relatively obscure blockchain designed for high-speed and low-cost transactions. It is built on the Ethereum blockchain, where the majority of stablecoin trasactions take place and the clear favorite of tradional finacial markets as they move onto the blockchain. Ethereum’s stablecoin reserves exceed the reserve pools of many nation-states, including Singapore and India.
SWIFT’s pilot program will involve over 30 major banks, including JPMorgan, HSBC, and BNP Paribas.
As reported by Binance Square:
“This is a historic moment for Ethereum L2s, and it could signal a new era of crypto adoption in traditional banking systems.”
It also signals a legacy payments system choosing to adapt, learning from the harsh lessons taught by firms such as Kodak, Nokia and Blockbuster Video.
This is not a one-off. Visa and Mastercard are also in the process of migrating to the blockchain, a necessary move after crypto stablecoin transactional volume surpassed them both (combined) by 7.7% last year.
With SWIFT’s pivot, one thing is clear: Traditional finance is moving to the blockchain.