Banks Arm SWIFT with Ethereum to Challenge Ripple’s Payment Dominance

SWIFT has initiated a pilot program leveraging Ethereum’s Layer 2 network, Linea, to explore blockchain-based messaging and stablecoin payments, marking a significant step toward integrating decentralized technology into traditional finance. The initiative, involving major banks such as BNP Paribas and BNY Mellon, aims to streamline cross-border transactions by combining payment instructions and settlement into a single on-chain process, potentially reducing costs and enabling real-time tracking of transactions . This move positions SWIFT to address longstanding inefficiencies in global payments infrastructure while aligning with the growing adoption of blockchain solutions in the financial sector .

Linea, developed by Consensys, was selected for its advanced cryptographic proofs and zk-rollup technology, which prioritize privacy and scalability. These features allow banks to process multiple transactions simultaneously while maintaining regulatory compliance, a critical factor in balancing efficiency with data confidentiality . By utilizing Linea’s Ethereum-compatible infrastructure, SWIFT seeks to demonstrate that blockchain can offer a secure, cost-effective alternative to legacy systems without compromising institutional requirements for transparency and control .

The pilot underscores a broader shift in the financial industry, where stablecoins are increasingly viewed as viable tools for cross-border settlements. With stablecoins like USDT and USDC processing over $1 trillion monthly in transactions, their speed and low fees challenge traditional payment networks. SWIFT’s exploration of stablecoin integration aligns with this trend, aiming to reduce reliance on intermediaries and streamline processes that currently involve multiple legacy systems .

This initiative also intensifies competition with Ripple, whose XRP Ledger has long been marketed as a faster, cheaper alternative for cross-border payments. Ripple’s own blockchain-based stablecoin pilot highlights the growing convergence between traditional finance and decentralized systems. However, SWIFT’s approach emphasizes institutional control over the rails of payment infrastructure, potentially reshaping the competitive landscape by enabling banks to own and manage their settlement networks .

Analysts suggest the pilot could redefine the role of SWIFT in global finance. If successful, the project might marginalize private payment networks by proving that tokenized deposits and stablecoins can operate seamlessly on a bank-controlled blockchain infrastructure. For investors, the outcome could determine whether value consolidates in corporate blockchains like Ripple’s or shifts to bank-led systems that dominate cross-border liquidity in the long term .

The pilot is expected to take several months to develop, with results potentially influencing future SWIFT standards. The collaboration builds on earlier experiments in blockchain interoperability, including SWIFT’s work with Chainlink on cross-chain communication solutions. By extending its messaging system to support blockchain-native features such as wallet addresses and smart contract oracles, SWIFT aims to position itself at the forefront of the transition to programmable finance .

: SWIFT Picks Ethereum Layer-2 Chain Linea For Stablecoin Test, Benzinga

: Global Banking Giant SWIFT Ignites Mainstream Adoption With Blockchain, Fastbull

Source: [1] SWIFT Picks Ethereum Layer-2 Chain Linea For Stablecoin Test (https://www.benzinga.com/crypto/cryptocurrency/25/09/47898320/swift-picks-ethereum-layer-2-chain-linea-for-stablecoin-test) [2] Global Banking Giant SWIFT Ignites Mainstream Adoption With Blockchain (https://www.fastbull.com/news-detail/global-banking-giant-swift-ignites-mainstream-adoption-with-news_6100_0_2025_3_15508_3)