Ant International and HSBC $HSBA (-1,57%) have started testing a new solution for cross-border payments that uses tokenized deposits on the Swift network and is based on ISO 20022.
According to the announcement, the initiative will leverage Swift's global messaging network and HSBC's Tokenized Deposit Service in combination with Ant International's secure and efficient blockchain technology.
In addition, the POC marks an important step in Ant International, HSBC and Swift's efforts to optimize the way businesses can take full advantage of tokenization for enhanced liquidity, programmable funding and 24/7 real-time settlement.
According to the official press release, Ant International and HSBC have integrated Ant International's internal blockchain infrastructure with Swift's networks to enable real-time cross-border treasury management using HSBC's Tokenized Deposit Service via HSBC Singapore and Hong Kong. At the same time, the introduction of a common protocol developed jointly with HSBC and Swift is expected to eliminate the need for Ant International to enter into secure and efficient individual bilateral arrangements with its banking partners, enabling Ant International to better leverage the tokenized deposit solutions of banks and financial institutions.
In addition, by combining the transparency and efficiency of tokenization with the overall scale and security of the existing payment infrastructure, the integration with the Swift network is expected to optimize the security and compliance of Ant International's blockchain-based service. The ISO 20022-based solution is expected to extend HSBC's existing AML systems, anti-fraud capabilities and infrastructure to the Tokenized Deposit Service, enabling digital money issuers to leverage ISO 20022 and the Swift network, while facilitating adoption by banks and external customers in future rollouts. This process will also enable further interoperability between digital money and traditional fiat money.
As HSBC expands its Tokenized Deposit Service, this initiative aims to ensure interoperability between new blockchain networks and established payment systems. In addition, the strategy aims to provide corporate clients with more choice in global liquidity management through the secure and efficient cross-border transfer of tokenized deposits.
The three parties are expected to build on the foundations of the POC while exploring future pilots and use cases for commercial deployment.
