What exactly is SWIFT? Deep dive
I was familiar with SWIFT at a rudimentary level. Hederacon has since created a sense of curiosity.
Who owns it & controls it?
The assumption seemed to be that due to its inefficiencies & outdated tech, that XRP would simply replace it. However, do we really think an organization this big, with so much money & power will just roll over & give up?
The Society for Worldwide Interbank Financial Telecommunication (Swift), legally S.W.I.F.T. SC, is a cooperative established in 1973 in Belgium (French: Société Coopérative) and owned by the banks and other member firms that use its service. SWIFT provides the main messaging network through which international payments are initiated.[2] It also sells software and services to financial institutions, mostly for use on its proprietary "SWIFTNet", and assigns ISO 9362 Business Identifier Codes (BICs), popularly known as "Swift codes".
As of 2018, around half of all high-value cross-border payments worldwide used the Swift network,[3] and in 2015, Swift linked more than 11,000 financial institutions in over 200 countries and territories, who were exchanging an average of over 32 million messages per day
That is 32 million transaction on Hedera per day. Only hedera has the tech capability to handle that load.
WHO CONTROLS IT: As of May 2024, the members directly represented on the board of directors were JPMorgan Chase (chair), Lloyds Bank (deputy chair), Bank of China, BNP Paribas, BPCE, Citi, Clearstream, Commerzbank, Commonwealth Bank of Australia, Deutsche Bank, Euroclear, FirstRand, HSBC, ING, Intesa Sanpaolo, KBC, MUFG, NatWest, Nordea, Royal Bank of Canada, Santander, SEB, UBS
If you made a Venn diagram between Hedera & SWIFT, there would be a lot of lapover when you factor in IMF, UBS, & Charles Atkins background in trad fi & U.S. treasury.
This use case seems like WHY Atkins was the guy they chose as CEO.
Hedera effectively solves all of SWIFTS current dilemmas with friction points & outdated tech. By leveraging Hedera's tech, it would allow them to remain in control while also being faster, safer, & quantum proof.
WHAT DOES SWIFT DO:
Swift acts as a carrier of the "messages containing the payment instructions between financial institutions involved in a transaction".[2]: 35 [12] However, the organisation does not manage accounts on behalf of individuals or financial institutions, and it does not hold funds from third parties.[2]: 1-2 It also does not perform clearing or settlement functions.[2]: 1-2, 35 [12] After payment has been initiated, it must be settled through a payment system, such as T2 in Europe.[2]: 36 In the context of cross-border transactions, this step often takes place through correspondent banking accounts that financial institutions have with each other.[2]: 35
SWIFT means several things in the financial world:
a secure network for transmitting messages between financial institutions; a set of syntax standards for financial messages (for transmission over SWIFTNet or any other network) a set of connection software and services allowing financial institutions to transmit messages over SWIFT network.
Does this sound like something Hedera could upgrade???
SERVICES:
There are four key areas that SWIFT services fall under in the financial marketplace: securities, treasury & derivatives, trade services, and payments & cash management.
Securities
SWIFTNet FIX (obsolete) SWIFTNet Data Distribution SWIFTNet Funds SWIFTNet Accord for Securities (end of life October 2017)[13] Treasury and derivatives
SWIFTNet Accord for Treasury (end of life October 2017)[13] SWIFTNet Affirmations SWIFTNet CLS Third Party Service Cash management
SWIFTNet Bulk Payments SWIFTNet Cash Reporting SWIFTNet Exceptions and Investigations Trade services
SWIFTNet Trade Services Utility
***ALL of their services would be upgraded using Hedera in multiple ways
Swift + IMF + Lunux Foundation + SEC regulatory clarity + Charles Atkins trad fi experience = ????