Banking Khabar /  A major technological shift is beginning to reshape the international banking system, with efforts underway to make cross-border payments faster, available around the clock, and more efficient. SWIFT, the global financial messaging network connecting banks and financial institutions worldwide, has introduced a blockchain-based ledger, opening up new possibilities for the traditional international payments model.

SWIFT announced in July 2026 that its blockchain-based ledger was ready for initial trials. Under the initiative, 17 banks from different continents are preparing to test 24/7 cross-border payments using tokenised deposits. The initiative is not aimed at replacing SWIFT but rather at integrating blockchain technology into its existing global banking infrastructure and taking international payments into a new phase.

What Is SWIFT’s Blockchain Ledger?

In simple terms, blockchain is a technology that records transactions in a digital ledger in a secure, structured and verifiable manner. SWIFT, however, is not creating a new currency in the manner of public cryptocurrency networks. Instead, it is developing shared infrastructure that can connect tokenised deposits issued by banks.

According to SWIFT, the new ledger is designed to maintain a secure, real-time record of transactions between financial institutions, validate transactions and enforce relevant rules through smart contracts.

Its initial application is focused on 24/7 cross-border payments. This could reduce some of the limitations caused by traditional banking hours, weekends and public holidays when customers send money internationally.

17 Major Banks Join the Trial

The initial blockchain-ledger trial involves ANZ, BNP Paribas, BNY, Citi, DBS, First Abu Dhabi Bank, FirstRand Bank, HSBC, Itaú Unibanco, Lloyds Bank, Mashreq, MUFG Bank, OCBC, Standard Chartered, UBS, UOB and Wells Fargo.

These banks are testing the use of tokenised deposits as they move toward real-world transactions. According to SWIFT, the system is intended to allow banks to move customers’ funds even at night or during weekends, while final settlement can continue to be completed through existing systems.

From Laboratory Testing to Real Transactions

The project is no longer limited to a concept or laboratory environment. In August, Standard Chartered and HSBC completed the first live interbank tokenised deposit transaction through SWIFT’s blockchain-based ledger.

The transaction demonstrated the potential for regulated bank deposits to be transferred across borders through SWIFT’s digital ledger.

UOB and HSBC subsequently completed live cross-border transactions in Hong Kong dollars. UOB became the first Singapore-headquartered bank to conduct a live transaction using SWIFT’s ledger.

Similarly, Citi has reported conducting live transactions in US dollars with First Abu Dhabi Bank and OCBC. According to Citi, these trials demonstrated the potential for 24/7 payment and settlement capabilities by reducing the dependence of cross-border payments on traditional cut-off times and weekend closures.

In early October, Mashreq and Citi also completed a live cross-border transaction using tokenised deposits through SWIFT’s blockchain ledger. This indicates that the project is moving further from the testing phase toward real-world banking applications.

What Is a Tokenised Deposit?

A tokenised deposit should not be treated as the same thing as a cryptocurrency. It is essentially a blockchain-based digital representation of a conventional deposit held at a bank, which can be used for transactions within the regulated banking and financial system.

Its primary purpose is not to create new money, but to make value already held within the banking system programmable and transferable more efficiently through digital infrastructure.

Under this model, a bank can represent a customer’s deposit in tokenised form and conduct transactions with another participating bank through a shared ledger. SWIFT is developing this model by connecting it with existing banking systems, compliance frameworks and risk controls.

What Could Change in International Payments?

The current cross-border payment system often requires coordination among multiple banks, correspondent banking networks, compliance processes, time zones and settlement systems. As a result, international transactions can involve challenges related to time, cost and liquidity management.

The Bank for International Settlements (BIS) has also noted that the sequential processes involved in correspondent banking, limited operating hours and multiple hand-offs can increase the complexity and cost of cross-border payments.

Tokenisation could bring payment instructions, compliance and settlement processes into a more coordinated workflow, according to BIS analysis.

This could potentially help:

• Enable 24/7 cross-border payments
• Reduce the time required for funds to reach recipients
• Improve banks’ liquidity management
• Increase transaction transparency
• Reduce reconciliation and manual processing
• Improve interoperability among different payment networks

Will Blockchain Replace SWIFT?

It would be incorrect to say that blockchain will replace SWIFT anytime soon. Instead, the current development should be understood as SWIFT connecting blockchain technology with its existing global banking network.

SWIFT’s objective is to develop interoperability between existing payment infrastructure and emerging digital-asset infrastructure.

SWIFT has said that it has worked with more than 40 financial institutions in developing the ledger in 2026. The objective is to make the new system interoperable with both existing and emerging payment systems.

In other words, the future of international banking is more likely to involve traditional banking and blockchain-based infrastructure working together rather than simply competing with each other.

BIS Also Embracing Tokenisation

Another important indication of the growing use of blockchain and tokenisation in international banking is the recent work of the BIS.

The BIS’s Project Agorá has tested a prototype for wholesale cross-border payments using tokenised commercial bank deposits and tokenised central bank reserves.

The project has demonstrated the potential for “atomic settlement” across different currencies, meaning that settlement for all parties is completed only when the transaction succeeds, while an unsuccessful transaction does not proceed to completion.

The BIS has emphasised the possibility of using tokenisation safely within the existing two-tier monetary system.

This means central banks can retain their role as the monetary anchor while commercial banks continue providing banking services to customers, with new digital technologies integrated into the existing structure.

Significant Challenges Remain

Although blockchain-based cross-border payments create significant opportunities, global implementation also faces regulatory, legal, cybersecurity, privacy and interoperability challenges.

Banking regulations, digital-asset laws, data-privacy frameworks and settlement systems vary from country to country, making it difficult to connect all systems through a common ledger.

The BIS has also pointed out that interoperability between permissioned and permissionless blockchain networks remains a challenge.

Therefore, the expansion of blockchain does not mean international banking will immediately become fully decentralised. Instead, blockchain is more likely to expand within regulated banking systems.

Why It Matters for Nepal’s Banks

The changes taking place in international banking infrastructure could also have long-term implications for banks and financial institutions in Nepal.

Remittances, imports and exports, international trade, overseas education and foreign employment make cross-border payments an important part of Nepal’s economy.

As the global banking system moves toward more real-time, transparent and interoperable payment settlement, Nepali banks may increasingly need to connect with new international payment infrastructure.

However, its adoption in Nepal would depend on regulatory arrangements of Nepal Rastra Bank, foreign-exchange regulations, AML/CFT compliance, cybersecurity and interoperability with international payment networks.

Where Is Banking Headed Now?

Initiatives such as SWIFT’s blockchain ledger, tokenised deposits and the BIS’s Project Agorá send a clear signal: international banking is not merely becoming digital; its underlying payment infrastructure itself is entering a period of transformation.

However, this transformation is not simply about making cryptocurrencies an alternative to traditional banking. Instead, efforts are focused on bringing regulated banks, central banks, existing payment networks and blockchain technology into a common financial ecosystem capable of delivering faster, 24/7 and more interoperable cross-border payments.

Therefore, the question is no longer simply “SWIFT or blockchain?”

The more relevant question for the future is “How will SWIFT and blockchain work together?”

Given the latest developments in international banking, the process of finding that answer has already begun.