With the Help of Chainlink, SWIFT Will Soon Include Cryptocurrency Services
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Established In the 1970s, SWIFT was the first ever worldwide payment system and the fastest way of transferring money. Ever since, there hasn’t been much improvement in their services. It can still take up to 4 days to process a cross-border payment.
To conduct an “experiment” involving the transfer of “tokenized assets” between dozens of financial institutions and several blockchains, SWIFT has teamed up with the blockchain oracle network Chainlink (LINK).
This is a really serious matter. Today, cryptocurrency is a kind of specialized asset class that only geeks and freaks can access. SWIFT is getting ready for a time soon when every bank will accept cryptocurrency.
The operation of SWIFT is quite similar to that of a “universal adapter” for the international banking system. SWIFT enables banks all around the world to send money, receive money, and interact with each other, not minding the currency being transferred or the countries involved.
Each time someone wires money to another person outside the country where the sender resides, such a person makes use of a BIC code, which consists of 8 digits and is a SWIFT ID. This is similar to a wallet address in the cryptocurrency sector.
SWIFT, which was developed in the 1970s, does not interface with blockchains, which is where Chainlink enters the picture and our investment opportunity starts.
The Missing Connection: Chainlink
A blockchain’s equivalent of a universal adaptor is Chainlink. It can standardize the data, extract data from any blockchain, and securely transport data between chains.
This is somewhat similar to a universal translator for human languages, given the immense intricacy of blockchain technology. (The Babel fish in cryptocurrency.)
SWIFT does not have a blockchain of its own, which could be used for messaging. This requires the organization to collaborate with Chainlink for this purpose. Chainlink will then serve as a middleman between banks while coordinating blockchain too.
The simple way to think about it is: SWIFT coordinates between banks, and Chainlink coordinates between blockchains. Provided this collaboration between Chainlink and SWIFT works out, the token will also gain some momentum from this, and its price will appreciate considerably.
Chainlink is starting to assist banks in connecting to cryptocurrency, which would make it a major player in the global financial system if it were a conventional business. Chainlink has a valuable service (blockchain oracle services), a sustainable competitive advantage (it was first to market and is by far the leader), and a good management team (led by Sergey Nazarov).
What the Future Holds
This intended partnership has huge implications. This is because it will revolutionize the current idea of what the future of cryptocurrency looks like. This implies that:
Banks will start keeping custody of people’s cryptocurrencies, similar to the way they now hold our cash.
Existing payment systems like SWIFT will be used by banks to send crypto within themselves and between blockchains.
Oracle protocols (such as Chainlink) will provide an important connection between traditional finance and decentralized finance, thus making them quite valuable.
Institutions prefer to use existing infrastructure and investments, as SWIFT noted in this article. In other words, banks do not wish to develop something entirely new. SWIFT is familiar to them. SWIFT has faith. Even though quick isn’t quite, well, quick, they still utilize it.
Banks will utilize SWIFT if it is compatible with cryptocurrencies. That appears to be the shape of things to come. Investors in cryptocurrencies should be aware that it appears Chainlink (LINK) will play an important role in this.
Eventually, SWIFT will only become swifter.
