Blockchain and remittances: NO TO THE SWIFT

Cheaper cross-border transfers are coming

BLOCKCHAIN HOLDS GREAT potential for improving payment systems, but for the moment that potential remains largely unrealised. In March Swift, a Brussels-based service owned by 11,000 banks that handles more than half of all cross-border interbank payments, said further progress was needed before distributed-ledger technology “will be ready to support production-grade applications in large-scale, mission-critical global infrastructures”. But it is coming, and cross-border payments are in its sights. Also in March, at Money 20/20, a payment-industry gathering in Singapore, Ravi Menon, managing director of Singapore’s central bank, argued that one of the strongest possible uses for blockchain technology is to “facilitate cross-border settlements”. Many think that Swift’s current payment system will move to the blockchain in the long run. In 2016 ICICI, an Indian bank, and Emirates NBD of the United Arab Emirates successfully tried out a network built by Infosys to handle remittances from the Gulf to India. Ant Financial has published 49 blockchain patents, more than any other company anywhere. Stefan Thomas of Ripple says that 100 financial institutions worldwide are committed to deploying his firm’s blockchain technology. Western Union, the giant incumbent of the global remittances industry, is also experimenting with it.

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