- SWIFT pilots blockchain messaging and interbank token with Linea, involving global banks.
- Linea uses zk-rollup technology to boost scalability and privacy, meeting banks’ compliance.
- Stablecoin market tops $270B as banks and tech firms explore regulated digital payments.
SWIFT, the world’s largest financial messaging network, has begun a blockchain pilot with Linea, an Ethereum Layer-2 developed by Consensys. According to a report from The Big Whale, the initiative will test on-chain messaging and a stablecoin-like interbank settlement token.
The trial involves more than a dozen major banks, including BNP Paribas and BNY Mellon. The project is intended to reduce transaction costs, accelerate cross-border settlements, and offer real-time monitoring of payment instructions. SWIFT currently connects more than 11,000 institutions but relies heavily on intermediaries, which slows down global transfers. Following the announcement, market interest in Linea’s institutional role increased in its trading activity. The token rose by almost 15% to reach $0.02807 from a low of below $0.025.
Linea Technology Selected for Privacy and Scalability
Furthermore, SWIFT aims to enhance operations and maintain leadership in global finance by shifting payment instructions and settlement onto the blockchain.
The consortium selected Linea because of its ability to handle secure and large-scale transactions. Developed by Consensys, Linea employs zk-rollup technology that reduces costs while maintaining Ethereum’s security. Its zero-knowledge proofs provide transaction confidentiality, allowing banks to find a balance between regulatory compliance and innovation.
Linea’s compatibility with Ethereum allows it to use an established infrastructure while providing better efficiency and lower fees. The network’s privacy-oriented design could be a decisive factor for institutions that seek both transparency and confidentiality.
Related: Cloudflare Plans NET Dollar Stablecoin Launch for AI Agents
Competition with Ripple in Cross-Border Payments
SWIFT’s latest development may challenge Ripple, a blockchain network that claims to be faster and cheaper for cross-border payments. In addition, Ripple’s strategy relies on tokenized settlements and is often considered a competitor to SWIFT’s traditional infrastructure. Further, Ripple has showcased its own stablecoin payment solution.
Despite this competition, SWIFT retains significant influence. Tom Zschach, SWIFT’s chief innovation officer, said banks may favour tokenized deposits and regulated stablecoins issued within established frameworks. With the pilot, SWIFT seeks to offer institutions worldwide reliable blockchain-based rail services to reduce reliance on other providers.
Outlook for Blockchain in Traditional Finance
If successful, the pilot could be one of the most notable instances of blockchain adoption in traditional banking. Furthermore, it could impact the way cross-border settlements are managed worldwide, bringing the industry closer to real-time and tokenized settlement transactions.
SWIFT has already tested tokenized fund settlement with UBS and Chainlink and is part of the Bank for International Settlements’ Project Agora. These efforts, combined with the Linea pilot, are indicative of a larger demographic shift in blockchain adoption towards mainstream finance.
The trial is expected to last several months. Its outcome could redefine how banks manage cross-border settlements and accelerate the transition toward tokenized, real-time global payments.
