Chainlink (LINK) creator Sergey Nazarov says a major milestone has been reached in its partnership with payments giant SWIFT.
In a new speech at the Sibos 2024 conference in Beijing, Nazarov says that Chainlink has developed a system that connects the traditional finance (TradFi) world with blockchain functions.
“Over many years now we’ve been collaborating with SWIFT to bring you the ability to use SWIFT messages and SWIFT standards in order to efficiently interact with blockchains with minimal additional investment by your institutions.
I’m very happy to say that this diagram (below) that we presented in the second pilot with SWIFT last year has now become a reality. So now we are in pre-production stage where we can start offering you something that you can actually start using with your existing institutional systems.”
Nazarov says that under the new system, the initial stages of a transaction will occur over the traditional SWIFT rails before Chainlink technology brings the information on-chain and transforms it into a blockchain transaction.
“The way that the system works – and this is how it will actually work in production for your systems to properly execute transactions using the SWIFT messages and SWIFT standards – is that there is a pre-settlement phase. The pre-settlement phase is where everyone agrees on what the nature of the transaction is. This is done through traditional SWIFT messages about settlement status, what the intent of the transaction is, and what you and your institutions want to achieve with a transaction. This continues to happen over the SWIFT network.
The next stage of the transaction is where things get interesting. You basically need to interact with a blockchain in order to do a digital asset transaction, whether that’s for a tokenized fund, a real world asset, central bank digital currency, any number of actual on chain assets, this is where Chainlink comes in and starts to solve very critical problems of turning those SWIFT messages into blockchain events.”
Chainlink is trading for $11.24 at time of writing, down nearly 7% in the last 24 hours.