SWIFT's blockchain testing has shown that the technology can support real-time liquidity monitoring and account reconciliation, the agency said in an interim report on the tests issued Friday.
The Society for Worldwide Interbank Financial Telecommunication, a Brussels-based bank cooperative that operates the world's largest bank messaging system, is testing distributive ledger technology along with 33 global banks to assess whether Nostro accounts — money a bank holds in foreign currency in overseas accounts — can be reconciled using blockchain technology.
Currently, banks monitor the funds in their overseas accounts via debit and credit updates and end-of-day statements.
The digital ledger technology's proof-of-concept testing "supports SWIFT's goal of making cross-border payments more efficient," Wim Raymaekers, global head of banking market at SWIFT, said in an accompanying news release.
However, further work on SWIFT's digital ledger technology is needed to assess how to interact with SWIFT users' variety of internal systems and how its blockchain technology will interact with legacy back-office systems, according to the report.
Testing on SWIFT's blockchain application began in April and is slated to conclude next month, with results to be released sometime in December.
The complete interim report is on SWIFT's website.