Swift chooses the Linea Blockchain to transform the global interbank communication system, and the integration of stablecoins is imminent.

Global banking communications giant Swift is quietly undergoing a revolutionary transformation in financial infrastructure. According to an exclusive report from The Big Whale on September 26, Swift has chosen the Ethereum Layer 2 network Linea developed by Consensys as the pilot platform for its interbank messaging system transformation. This decision marks an important milestone in the integration of traditional finance and blockchain technology, which could fundamentally change the way transactions occur between global financial institutions. More than a dozen international banks, including BNP Paribas and Bank of New York Mellon, will participate in this trial to explore how to migrate existing centralized messaging systems to blockchain infrastructure and integrate stablecoin functionality.

Swift Chooses Linea: A Historic Handshake Between TradFi and Blockchain

Swift (Society for Worldwide Interbank Financial Telecommunication) serves as the hub for global financial communications, connecting over 11,000 Financial Institutions and processing billions of payment orders annually. This vast network has chosen Linea as the pilot for its Blockchain transformation, which holds profound strategic significance.

According to informed sources, the main reason Swift chose Linea is its unique transaction confidentiality feature. Linea utilizes advanced zero-knowledge proof technology, which can ensure transaction verification while maintaining data privacy. This characteristic is crucial for the banking industry, which strictly adheres to regulatory requirements.

The technical architecture of Linea offers three key advantages:

· Privacy Protection: Zero-knowledge proof technology ensures that transaction details are only visible to relevant parties.

· Ethereum Compatibility: As a Layer 2 solution for Ethereum, Linea inherits the security and ecosystem of Ethereum.

· Cost-Effectiveness: Layer 2 technology significantly reduces transaction costs, making large-scale financial operations economically viable on the Blockchain.

A bank executive, speaking on condition of anonymity, stated: "We need a solution that can provide the advantages of Blockchain while also meeting strict regulatory requirements. Linea's privacy features and compatibility with Ethereum make it an ideal choice."

LINEA Token Price Reaction: Market Accepted Signals

This news had an immediate impact on Linea's native coin. Within just one hour after the announcement, the price of LINEA token surged from $0.02544 to $0.02814, an increase of 10.6%. This market reaction indicates that investors are optimistic about the prospects of the collaboration between Swift and Linea.

Pilot Program: From Messaging to stablecoin Integration

The collaboration between Swift and Linea is not limited to simple message transfer migration, but is a comprehensive technology transformation plan. According to sources from participating banks, this pilot will last several months, focusing primarily on two core areas:

1. Interbank Message Transmission Blockchain Transformation

Currently, Swift's messaging system relies on multiple intermediaries and centralized infrastructure, which increases operational dependencies and potential efficiency losses. Blockchain technology is expected to simplify this architecture through decentralization and automated processes, enhancing the system's resilience and efficiency.

The pilot program will test how to convert existing SWIFT MT and MX message formats into blockchain-compatible smart contract interactions while maintaining the integrity and security of the messages.

2. Integration and Application of Stablecoins

Even more revolutionary is that the pilot program will also explore the application of stablecoins in interbank settlements. This could fundamentally change the way international bank payments operate, shortening the current multi-day clearing process to near real-time settlements.

Participating banks will test how to use stablecoins on the blockchain for "Delivery versus Payment" (DvP) and "Payment versus Payment" (PvP) transactions, which are critical mechanisms for the tokenized asset market, expected to reach a scale of 30 trillion dollars by 2034.

Swift's Blockchain Strategy: More Than Just Linea

The selection of Linea as a pilot by Swift is not an isolated incident, but rather a part of its comprehensive Blockchain integration strategy. Since announcing its digital asset plan in September 2024, Swift has launched multiple Blockchain experiments:

October 2024: Launch of instant digital asset trials in North America, Europe, and Asia.

November 2024: Completion of tokenized fund settlement pilot with UBS Asset Management and Chainlink

Continuing: Participating in the Bank for International Settlements' Agora program

Collaborative efforts: Establishing partnerships with multiple central bank digital currency ( CBDC ) plans.

Swift's series of initiatives indicates that the global financial communication giant is seriously exploring how to integrate blockchain technology into its core business, rather than just making superficial technological attempts.

The Perspective of Participating Banks: Balancing Technology and Regulation

The banks participating in the pilot are cautiously optimistic about the plan. An executive from one of the participating banks stated, "The project will take several months to complete, but it is expected to bring significant technological transformation to the international interbank payment industry."

The main challenge faced by the banking industry is how to balance innovation and compliance:

Data Protection: Ensure that sensitive financial information is adequately protected on the blockchain.

Regulatory Compliance: Meet the regulatory requirements of different jurisdictions.

System Integration: Seamlessly integrate blockchain solutions with existing banking systems

Risk Management: Assessing and managing the potential risks brought by new technologies.

Participating banks generally believe that Linea's privacy protection features and compatibility with Ethereum provide a viable path to address these challenges.

Industry Impact: Reshaping Global Financial Infrastructure

Swift's decision to choose Linea for its blockchain transformation pilot could have far-reaching implications for the entire financial industry:

1. Accelerate Financial Institution Adoption of Blockchain Technology

As an authoritative institution for global financial communication, Swift's recognition of blockchain technology may encourage more Financial Institutions to accelerate the adoption of this technology. This could lead to the application of blockchain technology in the financial sector rapidly expanding from small-scale pilot projects to core business processes.

2. Promote the Development of Tokenized Asset Market

The collaboration between Swift and Linea particularly focuses on the trading and settlement of tokenized assets, which may accelerate the development of the global tokenized asset market. As more Financial Institutions are able to efficiently process tokenized assets through Blockchain, this market is expected to reach the anticipated scale of 30 trillion dollars.

3. Promote Cross-Border Payment Innovation

The current cross-border payment systems face issues such as low efficiency, high costs, and insufficient transparency. Swift's adoption of Blockchain technology could fundamentally change the way cross-border payments operate, achieving faster, more transparent, and more cost-effective international fund transfers.

4. Paving the Way for CBDC Development

The integration of Swift and Blockchain technology may provide an important foundation for the international interoperability of central bank digital currency (CBDC). This pilot could become a technical blueprint for future cross-border transactions of CBDC.

Future Outlook: Path from Pilot to Full Implementation

The pilot program between Swift and Linea is ambitious, but it still faces multiple challenges from pilot to full implementation:

Technical Verification: Ensure that the blockchain solution can handle the massive transactions of the Swift network.

Standardization: Establishing a globally unified standard for interbank communication on the Blockchain

Regulatory Coordination: Collaborate with global regulatory bodies to ensure that the compliance framework adapts to new technologies.

Industry Adoption: Convincing over 11,000 Financial Institutions worldwide to adopt the new system

However, if the pilot is successful, we may see the Swift network gradually transition to a blockchain-based infrastructure in the coming years, ultimately achieving a more efficient, transparent, and resilient global financial communication system.

Conclusion: A Milestone in the Fusion of Finance and Blockchain

Swift has chosen Linea for its interbank messaging system transformation pilot, marking an important milestone in the integration of TradFi and Blockchain technology. This decision not only reflects the increasing maturity of Blockchain technology, capable of meeting the strict demands of the financial industry, but also indicates that global financial infrastructure is undergoing a profound transformation.

As the pilot program progresses, we will see more details regarding technological implementation, regulatory coordination, and industry adoption. Regardless of the final outcome, the collaboration between Swift and Linea has sent a clear signal to the world: blockchain technology is no longer a fringe experiment in the financial industry, but is becoming a core force in reshaping global financial infrastructure.