22 Banks Join SWIFT Blockchain Proofbr>
Some 22 additional global banks have joined SWIFT‘s ongoing blockchain proof-of-concept (PoC). The PoC is designed to determine if blockchain 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. Nostros, a term derived from the Latin word for “ours,” are frequently used to facilitate foreign exchange and trade transactions.
The 22 new members joining SWIFT include ABN AMRO Bank, ABSA Bank, BBVA, Banco Santander, JPMorgan Chase Bank, Rabobank, Société Générale, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, among others. The banks will act as a validation group to test the blockchain application developed by the original six founding members in Australia and New Zealand Banking Group (ANZ), including BNP Paribas, BNY Mellon, DBS Bank, RBC Royal Bank and Wells Fargo.
Launched in January, 2017, the PoC recognizes the need for banks to receive real-time liquidity data in order to manage funds throughout the business day. At its core, the PoC builds on the rulebook defined by SWIFT as part of the recently published intraday liquidity standard.
The PoC will use a private permissions-based blockchain in a closed user group environment. It is leveraging the recently released Hyperledger Fabric v1.0 technology, and combining it with key SWIFT assets, in a move to make sure that all the information related to nostro/vostro accounts is kept private in a secure way. A vostro account is held in the currency of the country where money is on deposit.
The project will undergo testing over the summer months, with the results scheduled to be published in September and presented at Sibos in Toronto in October.
“Collaboration is the cornerstone of innovation,” said Wim Raymaekers, Head of Banking Markets and SWIFT gpi at SWIFT. “This new group of banks allows us to greatly extend the scope of multi-lateral testing of the blockchain application and thus adds considerable weight to the findings. We warmly welcome the new banks and look forward to their insights.”
“The potential business benefits ensuing from the PoC are clear,” said Damien Vanderveken, Head of R&D, SWIFTLab and UX at SWIFT. “If banks could manage their nostro account liquidity in real time, it would allow them to accurately gauge how much money is required in each account at any given point, ultimately enabling them to free up significant funds for other investments.”