SWIFT has signed a partnership with a fintech firm Monetago, through which it will experiment with blockchain applications in India, according to a press release.
MonetaGo is a New York-based company which offers blockchain services to financial firms. It uses technology to simplify information processes. It also has a Bitcoin exchange which was launched in June 2015 in Belfast and has been working with the Reserve Bank of India since 2017.
The deal is with the SWIFT’s Indian branch, SWIFT India, which was created in 1991 in collaboration with a number of local banks. Under the terms of the partnership, the entities will be experimenting with blockchain applications at local banks. The two parties will work by attempting to integrate their two networks.
Kiran Shetty, CEO of SWIFT India, said: “SWIFT India is committed to provide significant value to the Indian financial community through digitisation of trade. MonetaGo’s expertise in providing fraud mitigation solutions to avoid double-financing and check authenticity of e-way Bill gave us the confidence to partner with them.”
Jesse Chenard, CEO of MonetaGo, said: “Given India’s focus on a digital infrastructure which is supported by both policy and technological innovation, it makes sense that large institutional players are interested in these products and initiatives. This work is going to positively impact the information available to the banking industry at large.”
SWIFT is the main network through which banks send money overseas and has been in use since the 1970s. Cross-border payments with SWIFT are notoriously slow and expensive, and so it is threatened by the development of blockchain technology.
Ripple, a blockchain designed to facilitate international payments, is SWIFT’s most immediate competitor, seeing as it has been picking up bank partners at a steady pace. Ripple CEO Brad Garlinghouse recently said at a conference in Singapore that he expects his company to take over from SWIFT.
Ripple users were very excited earlier this month because of internet rumours that a technological update of SWIFT software was going give thousands of additional banks access to Ripple services; the date has come and gone, and the rumours have been proved untrue.
On its part, SWIFT has responded to the threat by developing a new payment service called GPI, which is meant to be significantly faster than its old system. This service was launched in 2017 and has seen a good rate of adoption from member banks. It has also tested blockchain applications for itself, finding them to be effective but that “it will take time before it is mature and scalable enough for mission critical applications.”