SWIFT Completes Tests for Euro Stablecoin in Bond Payments

SWIFT, the global financial messaging network, has completed a test involving Societe Generale's EUR CoinVertible (EURCV), a euro-pegged stablecoin, to settle tokenized bond transactions. The test explored the use of blockchain-based assets alongside traditional banking systems. This trial marks a step toward integrating tokenized securities into existing financial infrastructure.

The collaboration, led by SG-Forge, Societe Generale's digital asset unit, focused on executing core market operations, including issuance, delivery-versus-payment (DvP) settlement, coupon payments, and bond redemption. These functions were carried out using EURCV, a stablecoin launched on Ethereum in 2023.

The test aimed to demonstrate that tokenized bonds could leverage existing payment systems to enable faster, more secure settlements. By integrating ISO 20022 standards, the trial sought to align blockchain-based transactions with conventional financial messaging protocols.

Why Is This Move Significant?

Tokenized bonds and other onchain securities have faced challenges in scaling due to the separation between digital and traditional financial systems. Even when assets are tokenized, cash legs of transactions still rely on legacy systems with limited operating hours. This trial explored whether tokenized securities could use familiar bank infrastructure while maintaining compliance and liquidity.

Using a stablecoin designed to meet Europe's Markets in Crypto-Assets (MiCA) framework allowed the project to address regulatory concerns around settlement finality and auditability. EURCV is the first onchain settlement asset compliant with MiCA and compatible with SWIFT's interoperability capabilities.

The project also reflects a shift in how large institutions are approaching blockchain adoption. Instead of bypassing existing systems, they are testing ways to extend current standards into tokenized environments. This reduces the need for overhauls in operations and provides a smoother transition for financial institutions and corporates.

What Comes Next?

SWIFT and SG-Forge have not disclosed the specific blockchain networks used in the trial. However, SWIFT's broader strategy includes adding a blockchain-based ledger to its infrastructure stack, targeting real-time, 24/7 cross-border payments. SG-Forge is one of 30 financial institutions involved in this initiative.

Thomas Dugauquier, SWIFT's tokenized assets product lead, stated that the project is about creating a bridge between existing finance and emerging technologies. By proving SWIFT's ability to orchestrate multi-platform transactions, the network is paving the way for institutions to adopt digital assets with confidence.

This test does not signal immediate deployment but contributes to a growing body of pilots that could help tokenized securities, stablecoins, and messaging standards converge. As European regulation around crypto assets becomes more defined, projects that align with MiCA are likely to gain attention from institutions seeking compliant onchain solutions.