More Banks Join SWIFT Blockchain Proof of Concept
22 additional global banks have joined SWIFT’s blockchain proof of concept (PoC), designed to validate whether the technology can help banks reconcile their international nostro accounts in real time. A nostro account is an account that a bank holds in a foreign currency in another bank. These banks will test and validate the PoC’s blockchain application, currently under development by SWIFT and a group of six founding banks that launched the PoC in April 2017. Working independently of the founding banks, the 22 institutions will act as a validation group to further test the application and evaluate how the technology scales and performs.
The PoC aims to help banks overcome significant challenges in monitoring and managing their international nostro accounts, which are crucial to the facilitation of cross-border payments. Currently, banks cannot monitor their account positions in real time due to lack of intraday reporting coverage. As such, the PoC recognises the need for banks to receive real-time liquidity data in order to manage funds throughout the business day. Moving forward, the PoC blockchain application will undergo testing over the summer months, with the results scheduled to be published in September 2017 and presented at Sibos, the annual conference, exhibition and networking event organised by SWIFT for the financial industry, which will take place in Toronto in October 2017.
The PoC is being undertaken as part of SWIFT gpi, a new service for the cross-border payments industry by combining real-time payments tracking with same-day settlement for international payments. Since it became available in January 2017, 20 global transaction banks have begun actively using or implementing the SWIFT gpi service, with another 50 in the implementation pipeline.