Taurus Sees Three Obstacles for Banks on Swift Ledger
Swift’s ledger can support live payments, but banks still need to build their own wallet, custody, and tokenization infrastructure. Taurus sees this mainly as a link to existing payment rails, not a replacement for them.
Key Takeaways
- Swift’s new blockchain ledger can support live payments, but banks still need their own digital infrastructure to connect to it.
- Taurus CEO Lamine Brahimi points to three requirements: a permissioned ledger, wallet functionality, and tokenization with smart contracts.
- Swift reported live transactions with tokenized deposits, including an interbank transaction by HSBC and Standard Chartered and a weekend payment by DBS and Citi.
Swift’s new blockchain ledger can support live payments, but banks still need their own digital infrastructure to connect to it. According to Taurus CEO Lamine Brahimi, that means a permissioned ledger, wallet functionality, and tokenization with smart contracts.
Three Layers Are Still Needed
Brahimi, cofounder and managing partner of custody and tokenization company Taurus, said in an interview that a bank cannot simply plug into Swift’s ledger today. The institution first needs its own systems that can issue, manage, and store tokenized deposits.
In his view, Swift’s ledger mainly works as an orchestration layer. It should help institutions move tokenized deposits across borders 24 hours a day, while final settlement still runs through existing payment rails. Swift is not replacing banks’ internal systems with this setup, but connecting them instead.
Swift Takes a Step Toward Live Transactions
Swift said in July that 17 banks were preparing for live transactions with tokenized deposits. That marked the network’s first visible step toward modernizing its bank messaging system, which has played a central role in the traditional financial system since the 1970s.
In August, HSBC and Standard Chartered carried out the first live interbank transaction through Swift’s ledger. After that, DBS and Citi completed a cross-border dollar payment over the weekend, which was settled in minutes instead of up to two business days.
Brahimi said the extra technology is not necessarily a major hurdle for banks that already issue or manage digital assets. But it does make clear that tokenized deposits will remain mostly an institutional product, because both sides of the transaction need the same standards and compatible systems. IBM’s connection with Swift ledger also shows that banks mainly need the right software layer, in addition to the network itself, to direct these payments.
Why This Matters for Europe
The debate fits into a broader European move toward tokenized money and more modern payment infrastructure. The Bank for International Settlements has previously called on central banks to integrate tokenized technology into the financial system, while the European Central Bank is already working on links between DLT platforms and TARGET. For European banks, Swift’s approach shows that the move to tokenized deposits is not just about a network, but also about the systems behind it.
